NIGERIA: PETROLEUM TRUCK DRIVERS STRIKE ENTERS DAY

C O N F I D E N T I A L LAGOS 000654

SIPDIS

E.O. 12958: DECL: 04/28/2009
TAGS: ELAB EPET KDEM NI PGOV
SUBJECT: NIGERIA: PETROLEUM TRUCK DRIVERS STRIKE ENTERS DAY
FIVE

REF: LAGOS 631

Classified By: Political/Economic Chief Ava Rogers per 1.4 b and d


1. (C) Summary: In an effort to resolve the on-going
petroleum truck driver strike, the chairman of Zenon
Petroleum and Gas paid Lagos State government an undisclosed
fee, ostensibly to cover the impoundment fees levied against
striking drivers. However, Lagos State and the drivers
remain at loggerheads over where to park the petroleum
trailers and the strike has not/not yet been suspended. Five
days halted fuel distribution have stranded thousands of
commuters. Despite the consequences, the public appears to
support the State's effort to end the drivers' dangerous
practice of parking trailers on major highways. End summary.


2. (C) Zenon President and CEO, Femi Otedola, confirmed he
paid Lagos government to release 40 impounded petroleum
trucks. Striking drivers had made the release of these
trucks a pre-condition for ending the labor action (reftel).
Though the impoundment fines reportedly totaled N2million
(about $15,000),Otedola intimated he paid a significantly
larger amount. Otedola told us he called Governor Tinubu
April 28 in London to ask how he could help resolve the
strike. When Otedola expressed a willingness to pay the
impoundment fees, Tinubu reportedly retorted, "well if you
have so much money, pay N4million." Otedola did not divulge
the final amount of his payment.


3. (C) Zenon is the largest diesel marketer in Nigeria. For
Odetola, the strike is bad business and he is willing to pay
money to whomever in order to make it go away. Odetola said
in his view, Lagos Governor Tinubu's actions are politically
influenced. Having been unable for almost a year now to
secure the local government revenues owed Lagos by the
Federal Government, Tinubu must find ways to show he is
"still in charge." If the muscle-flexing also results in
extra revenue, so much the better, Odetola averred.


4. (SBU) The week-long strike has been a nightmare for
commuters who are paying up to 50 percent more for
transportation, when it can be secured at all. Black-market
fuel hawkers are recording huge profits, while major oil
marketers tally equally astounding losses. Otedola said in
five days, Zenon has lost over N3 billion in revenues and
incurred N250 million in demurrage charges on imported
diesel. Grasping for any resolution, Otedola offered to help
finance the alternative parking lots needed.


5. (SBU) Despite Zenon's largesse, the strike persists.
Peter Akpatason, President of the National Union of Petroleum
and Natural Gas Workers (NUPENG),told us the sticking point
is the State's insistence that drivers sign an agreement
pledging to no longer park on the highways. Union members
said they would only agree to such an undertaking, after the
state developed an alternative parking site. Akpatason
hinted a compromise may be reached where parties jointly
agree to "find a lasting solution to the problem".


6. (SBU) The Lagos government maintains signing the "I
won't do it again" declaration is standard operating
procedure before the release of any impounded vehicle.
Transportation Commissioner Muiz Benire has vowed not to
waive the stipulation, pronouncing it the only guarantee
against recidivism. Benire urged Lagosians to weather the
difficulties as part of the state's efforts to improve road
safety. Separately, a Lagos government official told us a
newly-wed couple's death was the catalyst for the state's
crackdown.

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Comment
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7. (C) In spite the difficulties caused by the strike,
Lagosians seem to support the government's actions for now.
Holding the truck drivers responsible for scores of
accidents, which were perhaps avoidable, they find the
state's measures justified. Many petroleum truck drivers
hail from northern Nigeria and accordingly owe little fealty
to the Lagos power-structure. Active involvement and
"lubrication" from major fuel marketers such as Otedola will
likely be what gets this strike resolved.
BROWNE