US embassy cable - 04LAGOS127

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the fuel tax has been rescinded, but the NLC insists it will 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