US embassy cable - 03ABUJA1172

C O N F I D E N T I A L SECTION 01 OF 02 ABUJA 001172 
 
SIPDIS 
 
 
E.O. 12958: DECL: 07/07/2008 
TAGS: ELAB, EPET, ENRG, PGOV, PHUM, ASEC, CASC, NI 
SUBJECT: NIGERIA: STRIKE ENTERS SECOND WEEK 
 
REF: ABUJA 1168 AND PREVIOUS 
 
 
 
 
Classified by Ambassador Howard F. Jeter; Reasons 1.5 (B) and 
(D). 
 
 
1. (U) Summary: The labor strike entered its second week 
today, as the GON and NLC failed to reach a compromise on the 
extent of the fuel price increase.  Information from labor 
sources was conflicting, with some insiders forecasting an 
imminent settlement and others predicting an extended strike. 
 With President Obasanjo traveling to Mozambique tomorrow for 
the African Union (AU) Summit, the strike may drag on if a 
settlement is not reached before he departs.  End Summary. 
 
 
Muddling Through 
---------------- 
 
 
2. (U) Abuja was quiet and traffic was light as many workers 
continued to stay home. In Lagos, sporadic gun fire was heard 
and burning tires obstructed many roads this morning.  The 
NLC issued a statement this afternoon claiming the police 
killed at least 10 people in Lagos today.  Embassy sources 
throughout the country confirmed that banks, markets, and 
government offices were mostly closed.  Security presence, 
both police and military, remained heavy throughout the 
country. 
 
 
 
 
Hopes Dashed Over Weekend, Negotiations Continued Today 
--------------------------------------------- ---------- 
 
 
3. (U) The NLC refused the GON's proposed deal of 35 naira 
per liter of fuel.  The NLC maintained that 32 naira per 
liter was its maximum.  However, negotiations between the NLC 
and GON continued this afternoon.   The Trade Union Congress 
(TUC), Nigeria's white collar union, refused to join the 
strike and the TUC's statement was the source of inaccurate 
press reports July 6 that the strike had ended.  PENGASSAN, 
the white collar oil union, reportedly set a mid-night 
deadline to reach agreement before reconsidering 
noninvolvement in the strike. 
 
 
 
 
Confusion at the Presidency and Labor 
------------------------------------- 
 
 
4. (C) President Obasanjo told Ambassador Jeter on Saturday 
that Labor negotiators were beginning to see the economic 
rationale for his insistence on 35 naira per liter as the 
floor below which the price could not drop.  He explained 35 
was the minimum price that would spur importation of refined 
product thus alleviating frequent fuel shortages.  Obasanjo 
predicted Labor could ultimately be satisfied with his 
explanation but there was still some convincing to do.  He 
believed NLC leader Adams Oshiomole understood these economic 
realities but was no longer in full control of the NLC and 
had to contend with a more hard-line element who wanted to 
hold out for a lower fuel price.  Nonetheless, according to 
Obasanjo, labor negotiators had conceded the need for a price 
hike.  Most had also conceded that Labor would support a 
second modest hike later on that would bring the fuel price 
to 40 naira per liter by the end of the year. 
 
 
5. (C) President Obasanjo told GON negotiators over the 
weekend not to give in to Labor's demand, according to 
several sources at the Presidency.  Obasanjo may have been 
overly optimistic about his ability to persuade Labor to 
accept the 35 naira per liter price but was correct in 
stating there was a split within the NLC between Oshiomole 
and more hard-line elements in the NLC's National Executive 
Council (NEC).  Oshiomole told Econoff that he would 
recommend that the NLC accept a 33 naira increase and allow 
gas prices to rise over the next year.  Senior NLC officials 
told Econoff on Sunday that most of the NEC rejected 
Oshiomole's proposal, adhering to the 32 naira ceiling. 
 
 
 
 
GON Officials Confirm At Least 13 Dead 
--------------------------------------- 
 
 
6. (C) GON police officials confirmed to Poloff that police 
killed four strikers (reftel) last week.  Contacts 
sympathetic to the strike claimed up to six more people 
killed by the police.  In Port Harcourt, press reports 
confirmed at least three deaths.  There are unconfirmed 
reports of strike-related deaths elsewhere in the South. 
Students and labor leaders were also reported temporarily 
detained throughout the country last week, with many 
remaining under detention without formal charges. 
Fuel and Food Prices Increase Dramatically 
------------------------------------------ 
7. (U) Fuel on the black-market sold for up to 300 naira per 
liter in Abuja, while in Kano and Zaria fuel was selling from 
100 to 120 naira per liter; most stations, with reserves 
running low, remained closed country-wide.  In Abuja's main 
market, prices have increased 30 to 40 percent over the last 
week, transportation costs have risen from 100 to 200 
percent. 
 
 
Comment: 
 
 
8. (C) The gap between the GON and NLC positions has 
narrowed. We now have independent voices inside and outside 
government putting pressure on both sides to quickly end the 
strike.  But closing the remaining distance will be tough. 
Obasanjo is stating there is no economic justification for 
descending below the 35 naira price level.  While Labor, 
given the success of the strike, sees no political reason to 
accede to the Government's position; moreover, most of Labor 
views the GON economic rationale suspiciously.  President 
Obasanjo leaves for the AU summit tomorrow morning and does 
return until July 11.  While Obasanjo is away, a resolution 
is even more unlikely.  Thus, if an accord is not reached 
today, the strike will continue.   End Comment. 
JETER