Gas Subsidies Lifted in Nigeria. Price Rise Causes Outrage

The Petroleum Products Pricing Regulatory Agency announced Sunday it was stopping to pay the subsidy on fuel to petroleum importers effective immediately. The government has said the move will save the country some $8 billion, some of which will be dedicated to much-needed infrastructure projects. Previous attempts to lift the subsidies have been met with nationwide strike actions.

Gas powers Nigeria's generators because the national electricity supply is sporadic at best, and fuel also keeps engines running in traffic that can snarl for hours. The government's announcement — made over a long holiday weekend — drew outrage. President Goodluck Jonathan already declared a state of emergency.

Many gas stations were shut down altogether on Monday, since gas station owners had only learned about the change at the same time as everyone else. Signs at a few stations put the cost at $3.50 per gallon (94 cents per liter) — just over double Sunday's morning price of about $1.70 per gallon (45 cents per liter). While that's cheap by American standards, most Nigerians subsist on just $2 a day and the rising gas prices are expected to force food prices to spiral as well.

Nigeria, an OPEC member nation producing about 2.4 million barrels of crude oil a day, is a top supplier to the United States, but virtually all of its petroleum products are imported after years of graft, mismanagement and violence at its refineries.

In a country where few people see any wealth from the country's staggering oil revenues, the subsidy was a rare government benefit and one Nigerians don't want to lose. (USA Today, 1/3/2012)

AAEA NIGERIA