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).

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FUEL PRICES JANUARY 21
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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the fuel tax has been rescinded, but the NLC insists it will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.

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AIRPORTS
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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.

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OTHER SECTORS
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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