US embassy cable - 03LAGOS2069

UNCLAS LAGOS 002069 
 
SIPDIS 
 
 
OPIC COLLECTIVE FOR CONAL DUFFY 
AMEMBASSY GABORONE FOR LESLIE BASSETT 
AMEMBASSY FREETOWN FOR ALEX SEVERENS 
 
 
E.O. 12958: N/A 
TAGS: ASEC, CASC, ELAB, ENRG, EPET, KDEM, NI, PGOV, PHUM 
SUBJECT: Strike Begins Thursday, October 9 
 
REF: (A) LAGOS 02043   (B) ABUJA 01700 
 
 
1.  Following its emergency National Executive Council (NEC) 
meeting in Ibadan on Saturday, October 4, the Nigeria Labour 
Congress (NLC) announced a nationwide strike to begin at midnight 
on Thursday, October 9.  NLC President Adams Oshiomhole said the 
Thursday start date allows labor leaders and NGOs to strengthen 
their mobilization efforts and gives workers time to prepare for 
the anticipated long battle with the GON.  Oshiomhole said the 
strike and campaign against price deregulation in the oil sector 
will be managed under the auspices of a broad coalition of trade 
unions, civil society organizations, and other NGOs.  This 
partnership will be known as the Labor Civil Society Coalition 
(LASCO).  LASCO has demanded that gas prices return to the pre- 
October 1 rate of 34 naira per liter, the repair and full 
operation of all local refineries, and a publication of contracts 
awarded for the repair of refineries. 
 
 
2.  Oshiomhole said the decision to deregulate fuel prices is not 
a party policy or party agenda, but solely that of a President 
"who does not care about the plight of his people."  He added that 
previous administrations offered specific strategies regarding the 
use of money derived from such increases while the GON has not 
explained how it plans to spend the money saved by deregulating 
gas prices.  Oshiomhole also warned that price hikes will occur 
regularly and could reach two hundred naira before the end of 
Obasanjo's tenure. 
 
 
3.  Aviation workers under the National Union of Transport Workers 
(NUATE) and Air Transport Service Senior Staff Association of 
Nigeria (ATSSAN) have decided to join the strike and advised 
airlines not to use Nigerian airspace.   Unlike the July strike to 
protest an earlier price hike, ATSSAN claims air traffic 
controllers are prepared to join the effort, which would likely 
ground both domestic and international flights.   Uncertainty 
regarding air travel in Nigeria may affect the All Africa Games, 
prompting many international visitors to consider whether they 
should leave early or risk being trapped in Nigeria until the 
crisis is resolved. 
 
 
4. (SBU) Comment:  While the least likely scenario would be a 
resolution that includes a return to regulated prices and 
government subsidies, it is still not clear how the GON will react 
to the planned strike.  Despite a deteriorating relationship 
between the GON and NLC, Oshiomhole maintains a good working 
relationship with Obasanjo and will likely seek a negotiated 
resolution.  If the two sides reach an agreement, Oshiomhole will 
have to sell it to a constituency that already believes the GON 
does not bargain in good faith, as the government has failed to 
implement several agreements during the past year. 
 
 
5. The GON continues to defend its decision to deregulate the 
downstream sector, however, President Obasanjo and several top 
government chieftains have consistently dissociated themselves 
from actual increases in gas prices.  Instead, government 
officials have been quick to blame oil marketers for the price 
hikes.  The GON will likely refuse to negotiate the issue of gas 
prices with labor under the pretext that it is not responsible for 
the increases.  A prolonged strike may force the GON to consider a 
strategy that defines how the GON plans to spend money saved by 
deregulating prices.  This type of agreement is not without 
precedent.  The two previous administrations addressed criticism 
of increased fuel prices by establishing socioeconomic development 
initiatives.  Babangida formed the Directorate for Food, Road and 
Rural Infrastructure and Abacha established the Petroleum Trust 
Fund.  We predict that LASCO will back down on the issue of 
deregulation, but it could push for a resolution that redirects 
funds previously used for subsidizing imported fuel to repair 
Nigeria's refineries and promote economic development.  However, 
it will be virtually impossible for the refineries to be brought 
up to anything approaching a competitive standard in the near 
future. 
 
 
6.  The duration of the strike depends largely on labor's ability 
to convince Trade Union Congress (TUC) associations to join the 
effort, particularly air traffic controllers under ATSSAN and the 
Petroleum and Natural Gas Senior Staff Association of Nigeria 
(PENGASSAN).  ATSSAN would have a significant impact on 
international travel at a time when Nigeria is hosting thousands 
of international visitors, while the Department of Petroleum 
Resources (DPR) employees under PENGASSAN can affect the oil 
industry's ability to export petroleum products.  DPR is Nigeria's 
oil and gas industry's regulatory body responsible for authorizing 
crude oil exports.  Their involvement may bring the two sides to 
the negotiating table sooner than expected.  End comment.