US embassy cable - 03ABUJA1157

C O N F I D E N T I A L SECTION 01 OF 03 ABUJA 001157 
 
SIPDIS 
 
 
STATE PASS USTR 
STATE PASS AF/W, INR, EB 
 
 
E.O. 12958: DECL: 07/02/2008 
TAGS: ELAB, EPET, ENRG, PGOV, ASEC, CASC, NI 
SUBJECT: NIGERIA: GON AND LABOR REMAIN AT LOGGERHEADS AS 
FUEL STRIKE CONTINUES 
 
REF: (A) ABUJA 1147 (B) ABUJA 1135 (C) ABUJA 1107 (D) 
     ABUJA 1091 
 
 
Classified by Ambassador Howard F. Jeter: Reasons 1.5 (B) and 
(D). 
 
 
1. (U)  Summary: Nigeria has entered the third day of a 
national strike, with no agreement in sight between the 
National Labour Congress (NLC) and the Obasanjo 
Administration over fuel prices.  Tensions in Abuja rose 
today as police clashed with NLC leaders and demonstrators. 
Street clashes continued in Lagos and other parts of the 
south and a major demonstration is planned in Kano later 
today.  Crude oil production appears unaffected thus far, but 
the senior staff union PENGASSAN has now stated it will join 
the strike if no agreement is reached by midnight Sunday, 
July 6.  Air traffic experienced increased delays and 
disruptions, as strike supporters found ways to sporadically 
block operations.  End Summary. 
 
 
Obasanjo Intransigent 
--------------------- 
 
 
2. (U) A senior official at the Presidency told Poloff that 
Obasanjo was, for now, "intransigent" on rolling back the 
fuel price increase. "These meetings are a waste of time 
because we have been instructed not to compromise," he 
claimed.  During a speech at the Presidency on Monday, 
Obasanjo professed that with the fuel subsidy gone, the GON 
would better fund hospitals, roads and schools; the same 
justification he used for the last increase.  He also said 
that the price hike was good because it would curb Nigerians' 
appetite for road travel. Obasanjo's logic was that since 
fuel was now more expensive, the average Nigerian would 
travel less, stay at home more, and be more industrious.  He 
also quipped that less travel on Nigerian roads would save 
the GON millions of naira on road repair bills. 
 
 
NNPC Not Optimistic 
------------------- 
 
 
3. (U) Austen Oniwon, a senior aide to Nigerian National 
Petroleum Corporation (NNPC) Group Managing Director 
Gaius-Obaseki, confirmed to Econoff that the GON and NLC 
remained at loggerheads.   Stating that during yesterday's 
meeting, the NLC indicated willingness to accept a small fuel 
price increase.  The two sides could not agree on the exact 
amount. Oniwon was not optimistic that the NLC and GON would 
reach an agreement during meetings scheduled for today. 
Although the Permanent Secretary and Acting Minister of Labor 
told the Ambassador this afternoon that progress was being 
made and he thought a settlement was imminent. 
 
 
4. (U) NLC officials privately indicated to Emboff that they 
would be willing to accept a 5 to 7 naira increase in fuel 
prices but maintain their public posture that no increase is 
acceptable.  Press reports on Monday indicated that the GON 
might consider a reduction.  Nonetheless, in public 
appearances over the last two days, Obasanjo has stubbornly 
advocated keeping the full price hike in place. (Comment: 
Obasanjo, by engaging the NLC in marathon meetings, may be 
stalling for time in hopes that the strike will fizzle.  End 
Comment) 
 
 
NLC Prepared For The Long-Haul? 
------------------------------- 
 
 
5. (U) NLC senior official Benson Upah confirmed last night's 
negotiations made no headway.  Upah said he was very 
pessimistic that an agreement could be reached soon, stating 
"we are in for the long haul, and we are prepared".  All NLC 
officials were concerned by the GON's continued excessive use 
of force to quell labor's peaceful demonstrations at Abuja's 
Federal Secretariat and other locations, he stated. 
 
 
White Collar Oil Union May Join NLC 
----------------------------------- 
 
 
6. (U) Kenneth Narebor, General Secretary of the white-collar 
petroleum workers' union PENGASSAN, confirmed that he issued 
a warning yesterday that PENGASSAN members will join the 
nation-wide strike next week if no agreement were reached by 
midnight, July 6.  Narebor said a directive will be sent out 
later today to all PENGASSAN's units instructing them to shut 
down oil production facilities if ongoing negotiations 
between the NLC and the federal government remain deadlocked 
by Saturday, July 5.  He also said his union is "dead 
serious" about this warning, and will ensure that the oil and 
gas sector is completely shut down by the weekend if a 
breakthrough were not achieved.  He stated he was, however, 
optimistic that on-going talks between NLC and GON would 
produce positive results. 
 
 
7. (U)  Meanwhile, NUPENG Organizing Secretary Bernard Ugbi 
reported that his union had not previously considered a 
shut-down option, but added that it cannot be ruled out in 
view of PENGASSAN's new statements.  Until now, the two 
unions have agreed to keep oil flowing during the strike so 
as not to completely undermine Nigeria's economy while NLC 
pressures the federal government for action on the fuel price 
issue.  On July 2, a Conoco representative echoed earlier 
reports from Shell and ExxonMobil that while its headquarters 
are operating with skeleton staff, crude production has not 
been affected in the first two days of the strike. 
Police Assaults Journalists, Imprison Labor Leaders 
--------------------------------------------- ----- 
 
 
8. (U) Demonstrations continue throughout Abuja on Wednesday. 
 Police reportedly fired shots and used tear gas to disperse 
demonstrators at the Federal Secretariat, the Federal Capital 
Development Authority, Ministry of Works and Housing and 
Abuja's main market.  We have no information on possible 
injuries during these incidents.  During a NLC-led 
demonstration at the Federal Secretariat yesterday, police 
assaulted four journalists, hospitalizing one, for taking 
photos.  Police incarcerated over twenty labor leaders in 
Abuja yesterday and reportedly imprisoned scores of NLC local 
leaders nation-wide. Maj. Gen. G. A. Kpamber was accused of 
ordering security at the Secretariat to use live ammunition 
to prevent a speech by NLC President Adams Oshiomhole on 
Monday. 
 
 
9.  (C) Confirming previously reported deaths, a security 
official told Emboff that the strike is "gaining momentum." 
A senior military officer echoed this sentiment, telling 
Poloff that Defense HQ is "increasingly concerned" about the 
situation. 
 
 
10.  (U)  More vehicles have taken to the streets in Abuja, 
but virtually all of the North remains shut down.  Gas 
stations throughout the North have received no deliveries for 
more than 10 days, but fuel has been generally unavailable at 
stations for more than a year.  In Abuja, the stations opened 
for business Wednesday, but were evidently ordered closed 
after the morning demonstrations, stranding hundreds of 
vehicles queued up for fuel. 
 
 
11. (U)  Port Harcourt remained very calm on Wednesday 
morning.  Some private cars are plying the streets, but gas 
stations have run out of fuel and are shuttered.  In spite of 
reports in the government-influenced press that the strike 
has had no effect in Rivers State, only 20 percent of the 
civil service, almost all senior staff, reported for work at 
the Federal Secretariat today.  NLC representatives entered 
the buildings on Tuesday and effectively chased workers out. 
Workers arriving Wednesday morning found an increased police 
presence at the Secretariat compound.  The federal government 
is both tightening security and offering incentives to civil 
service workers willing to come to work.  One government 
circular requires staff to display their certificates of 
employment to their superiors on a daily basis.  Another 
lists incentives such as increased housing allowances, 
transportation and meals upwards of 300 percent more than 
present rates as a ploy to entice workers back to their 
desks.  However, similar proposals were forwarded several 
months ago before the dispute over wages, so most civil 
servants view these incentives as empty promises. 
 
 
FLIGHTS ON OR OFF? 
------------------ 
 
 
12.  (U)  Domestic airlines and the government-influenced 
press report that normal flight operations have resumed 
throughout the country.  Spot checks indicate, however, that 
many flights have been canceled for lack of passengers.  Many 
of the few remaining flights have been delayed. 
 
 
Comment 
------- 
 
 
13.  (C)  The strike appears to be holding its own into its 
third day.  While it is difficult to assess the compliance 
with the NLC's "stay-at-home" directive, it is apparent that 
the level of confrontation on the street has risen since 
Monday.  While the GON-influenced press generally downplays 
the strike, wire service reports that the country is in 
flames are equally exaggerated. 
 
 
14. (C) The truth remains somewhere in between. It is 
unlikely that the NLC will be willing to show much 
flexibility without significant concessions on the part of 
government.  Meanwhile, the Obasanjo Administration is losing 
even greater political support the longer the strike drags 
on.  End Comment. 
JETER