US embassy cable - 04ABUJA1032

C O N F I D E N T I A L SECTION 01 OF 02 ABUJA 001032 
 
SIPDIS 
 
E.O. 12958: DECL: 06/08/2014 
TAGS: PREL, PGOV, PTER, PHUM, EPET, NI 
SUBJECT: NATIONAL STRIKE BEGINS SLOWLY, PICKS UP STEAM 
 
REF: A. ABUJA 1012 
 
     B. LAGOS 1188 
 
Classified By: AMBASSADOR JOHN CAMPBELL FOR REASONS 1.5 (b) AND (d). 
 
1. (C)  SUMMARY:  The Nigerian Labour Congress' (NLC) strike 
to protest the latest hike in fuel prices began the day 
slowly June 9 but continues to pick up steam.  More 
businesses closed as the day progressed, including businesses 
outside Abuja and Lagos.  No major public demonstrations have 
been reported, and the strike remains for the most part 
non-violent.  The Federal High Court in Abuja issued a 
decision at 4 PM on June 8, refusing to grant a new 
injunction to ban the strike but calling instead for the GON 
to return to a 38 Naira/l price for gasoline and the NLC not 
to strike per the judge's earlier decision of February 9, 
2004.  The NLC has chosen to ignore the implied ban on the 
strike, saying they do not trust the GON to honor its 
commitment.  The strike seeks to feed on widespread anger 
among Nigerians, and the NLC, along with most civic and 
political groups, can be expected to milk as much political 
mileage from this dispute as possible.  END SUMMARY. 
 
2.  (U)  This cable is a joint product of Embassy Abuja and 
Consulate General Lagos. 
 
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The Progress of the Strike 
-------------------------- 
 
3.  (SBU)  The Nigerian Labour Congress' (NLC) strike 
(reftels) against the latest hike in fuel prices began the 
day slowly but continued to pick up steam in Abuja and 
elsewhere June 9.  As expected, initial participation in the 
strike was stronger in Lagos than Abuja, and cautious 
everywhere (Ref A).  NLC teams have been circulating to 
inform the public that the strike is on, and to encourage, or 
force, compliance.  As the news travels, many businesses in 
Abuja have closed early, with banks, hotels and petroleum 
vendors suffering the highest rate of closures.  Only about 
half the employees at the Nigerian Federal Secretariat 
reported for work on June 9, and many left early with no 
plans to return tomorrow. 
 
4.  (SBU)  A heavy security presence in many locations has 
kept strikers off the streets in many places, but by midday 
businesses were closing in Makurdi, Kano, Kaduna and Katsina. 
 One Embassy contact in Kano stated that everyone "expected 
the strike," although the public remained unsure about its 
effectiveness.  "We anticipated closing down today, so there 
have been no surprises," he continued.  The leaders of the 
NLC have yet to schedule any public demonstrations, so the 
threat of confrontation with security forces has not 
materialized.  A group of police patrolling Abuja's central 
district told PolOff that they support the strike and only 
"hope that labor can be trusted this time." 
 
5.  (SBU)  Confusion was the keyword in the runup to the 
strike, with GON talking heads claiming the strike had been 
canceled while the independent media were warning Nigerians 
to prepare for the action.  The Federal High Court in Abuja 
issued a decision at 4 PM on June 8 refusing to grant an 
injunction to ban the strike but calling instead for a return 
to the status quo of February 9, 2004.  This judgment was 
appealed by the GON and the appeal has yet to be decided. 
(NOTE: The February decision, which was a non-binding 
"advisory" from the same High Court, encouraged the GON to 
hold the petroleum price at 38 Naira per liter and urged the 
NLC not to engage in a strike.  END NOTE.)  The judge also 
called on the Inspector General of Police to "enforce the 
(February) order on both parties." 
 
6.  (C)  The GON claims as of COB June 9 that it cannot and 
will not reduce the price of fuel.  The NLC expressed its 
distrust of the GON and called for the strike to continue, 
claiming that any ban from the court "had yet to be served" 
on NLC's leadership.  After the court ruling, NLC and GON 
negotiators met for over seven hours on the evening of June 
8.  GON officials told PolOff they had been ordered to "give 
nothing" to labor.  One commented that the President was 
still worried about the State of Emergency in Plateau State 
and violence in many other parts of Nigeria.  "He does not 
want any challenge to this authority to stand," the 
negotiator said.  A labor representative said that 
negotiations had been futile since the GON gave nothing while 
"we held out for the old (38 Naira) price." 
 
-------------------------- 
International Implications 
-------------------------- 
 
7.  (SBU) For now, the strike has only interfered with 
Nigeria-internal air traffic.  Some internal flights have 
been canceled, but movement continues.  Reports from 
ChevronTexaco's and Mobil's upstream operating managers 
indicated no adverse effects from the strike on production or 
lifting as of early afternoon June 9.  Both companies had 
stocked their storage facilities with fuel and supplies 
earlier.  Although shift changes and supply runs were 
interrupted June 9 by canceled flights, ChevronTexaco 
reported lifting crude as planned by at least one tanker off 
Escravos. 
 
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Private Marketers Consider Dropping Prices 
------------------------------------------ 
 
8. (SBU) O.T. "Jimmy" Adelekan, Executive Director of Texaco 
Nigeria, told Econoff on June 9 that after a stakeholders 
meeting in Abuja on June 8, and in the light of the court 
order later that night, the marketers have generally agreed 
to roll back fuel prices.  He said executives from Oando 
(formerly Unipetrol), AP, and Conoil agreed to a rollback in 
principle at the June 8 stakeholders' meeting.  Mobil and 
Total, the remaining two "major marketers," did not send 
representatives to the meeting. 
9. (SBU) Adelekan said early June 9 that he was then on his 
way to a meeting with PPPRA officials to determine a workable 
arrangement for fuel sales in a price-restricted regime. 
Adelekan said it would be likely that retailers would sell 
gasoline within a price band of 41-43 naira per liter (NNPC 
would likely sell at 38 naira at its two stations in Abuja 
and Lagos, the price the unions are demanding).  He said the 
independent marketers will be able to do this only if NNPC 
guarantees a depot price of 33.5 naira per liter for fuel 
imports. 
 
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What's Next? 
------------ 
 
10.  (C) COMMENT:  The NLC and its many civic and political 
group allies want more than anything else to re-establish 
their credibility with the Nigerian public.  They are not yet 
inclined to compromise on the fuel prices, and can be 
expected to milk as much political mileage from this dispute 
as possible.  The GON is not backing down either.  June 10 is 
likely to see more strike than June 9, unless a deal is 
brokered during the night. 
CAMPBELL