Nigerian President Partially Restores Motor Fuel Subsidy

Nigerians Protest Lifting of Motor Fuel Subsidy

In response to nationwide protests, Nigerian President Goodluck Jonathan offered to partially reinstate a contentious subsidy for motor fuel and ordered soldiers to the streets.  and the threat of an oil workers' strike in Africa's largest crude producer, in steps to head off fresh unrest. President Jonathan announced that Nigeria would once again use its vast oil revenue to subsidize the pump price of gas, fixing the per-liter price at 97 naira ($2.27 a gallon). The move essentially reduces the price of gas in Nigeria about a third from the current market price.

The announcement marks a significant policy reversal for the Nigerian president who is facing one of the most challenging periods of his two years in office. The concession comes 16 days—and a week of paralyzing strikes—after Mr. Jonathan completely scrapped the subsidy in an attempt to raise an estimated $7.5 billion for infrastructure.

AAEA Nigeria

Since the subsidy's removal, tens of thousand of protesters have swarmed major city centers, and Nigeria's top two labor unions have staged strikes, demanding full restoration of the subsidy—viewed by many as the only benefit Nigeria's poor have enjoyed from its oil wealth. Last year, the subsidy had kept a liter of gas at 65 naira, but government officials said corruption and fraud made the program wasteful. (WSJ, 1/16/2012, photo courtesy WSJ)