STRIKE BEGINS IN NIGERIA JANUARY 21

UNCLAS SECTION 01 OF 02 LAGOS 000127 SIPDIS SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY E.O. 12958: N/A TAGS: ECON ELAB PGOV EINV NI SUBJECT: STRIKE BEGINS IN NIGERIA JANUARY 21 REF: A. 2004 ABUJA 99 ¶B. 2004 LAGOS 111 ¶C. 2003 ABUJA 1700 ¶1. (SBU) Nigerians awoke to a state of confusion Wednesday, January 21, as competing reports circulated as to whether the Nigerian Labor Congress (NLC) was continuing its call for a nationwide strike (ref A). Although commerce continues across sectors, the NLC maintains that the strike is on, and some workers stayed home on Wednesday. ¶2. (SBU) The NLC called for a strike to force the government to eliminate a 1.5 naira fuel "tax" recently imposed as part of President Obasanjo's 2004 budget request, and to roll back what the NLC claims are harmful aspects of the GON's downstream deregulation policy (ref B). The NLC specifically demands that gasoline be sold at 34 naira per liter, as it was before the President announced on October 1, 2003, that the downstream sector would be henceforth deregulated (ref C). Since that date, gasoline prices have risen to 42 to 43 naira per liter in Lagos, and higher in other regions. Black-market sales command much higher prices. Union leaders maintained throughout Wednesday morning that a strike is being conducted, and NLC president Adams Oshiomhole is in Lagos for a strategy meeting scheduled for Wednesday afternoon (septel). -------------- FUEL PRICES JANUARY 21 -------------- ¶3. (SBU) The GON has stated several times in recent days that the fuel tax has been rescinded, but the NLC insists it will not call off the strike until it has proof at the pump that the consumer price for gasoline has been lowered. For its part, the GON stated that it has lowered prices at the two stations run by the Nigerian National Petroleum Corporation (NNPC). By mid-morning in Lagos, the price of gasoline at the NNPC station was 41 naira per liter. But a survey of other stations, including Conoil, Mobil and Total, indicate that private retailers' prices remain at 42.50 naira per liter. Oando, formerly Unipetrol, is selling gasoline at 43 naira per liter. Private marketers told us they will pass the "tax" on as long as their shipments are charged the one naira-fifty levy at port (septel). ¶4. (SBU) Consulate staff sent to monitor the situation reported at mid-morning that most fuel stations on Lagos' mainland, where the bulk of Lagosians live, were not selling fuel. They noted that some stations appeared to be staffed but not operating. This may be due to confusion over whether the attendants, most of whom would be union members, should be on strike, or confusion over pricing. It may also be a function of supply problems. Tanker drivers are usually the first union members to go on strike, so supply may not have been delivered widely overnight. Further, Nigeria continues to face a fuel supply crunch, which is being exacerbated by the threat and now possible execution of a strike (septel). Nonetheless, a Mobil station on the more exclusive Victoria Island, which was closed Tuesday late afternoon probably due to a lack of supply, was selling fuel Wednesday morning. Only a few cars queued for fuel Wednesday, whereas the line stretched for blocks Tuesday morning as drivers prepared for the strike. -------------- AIRPORTS -------------- ¶5. (SBU) Union officials claim to have warned international airlines to avoid Nigerian airspace beginning January 21 because of the strike, and on Wednesday morning union officials at the airport stated their workers were striking. However, consulate expediters at the Lagos international and domestic airport complex reported at noon that airline workers were at their desks, passengers moved through terminals in an orderly fashion, and flights appeared to be operating as scheduled, including the daily Virgin Atlantic flight to London. -------------- OTHER SECTORS -------------- ¶6. (SBU) Executives with the nation's first and fourth largest banks told us that their branches are closed today, Wednesday, and would remain so until they can assess the situation. It was widely reported that many Nigerians withdrew funds from banks Monday and Tuesday in order to have sufficient cash on hand to get through the strike. ¶7. (SBU) Traffic was lighter than usual throughout Lagos, but transport vehicles and taxis, whose unionized drivers are usually at the forefront of strike actions, were plying the streets in fairly large numbers. DHL and FEDEX had not delivered parcels as of noon. Crude production does not seem affected. No violence has been reported. ¶8. (SBU) Mission will continue reporting daily updates and specific septels as the situation warrants. HINSON-JONES