Cablegate: Nigeria: Deregulation and the Fuel Tax: Higher

This record is a partial extract of the original cable. The full text of the original cable is not available.




E.O. 12958: N/A

1. On January 7, 2004, the Nigeria Labour (NLC) warned
the GON that labor and civil society groups will call a
nationwide strike beginning January 21 if the GON fails
to rescind its proposed 1.50 naira per liter fuel tax
before that date. Although the National Assembly has
not approved the tax proposal (in fact, Obasanjo has
deleted it from his budget request), the fuel tax or an
equivalent levy is reportedly being charged at service
stations throughout the nation. Since issuing the 14-
day ultimatum, labor has emphasized that its position
includes an earlier demand that service stations sell
fuel at the pre-October regulated price of 34 naira per
liter. Anthony Jones, the AFL-CIO Solidarity Center
Country Director who is working closely with the NLC to
avert a strike, told Laboff that "mobilization" is just
beginning, suggesting that the Labor and Civil Society
Coalition (LASCO) efforts will likely be much less
organized than the nationwide strike in July 2003 and
the "mobilization" campaign for a threatened strike in

2. Laboff spoke to NLC Deputy President Joseph
Akinlaja on January 13 regarding the possible strike
and asked him if the NLC would consider suspending the
strike if the GON does not approve the tax. Akinlaja
said the NLC would continue mobilizing until fuel
prices revert to the 34 naira per liter price. Despite
press reports and public perception that clearly
focuses on the fuel tax or levy as the impetus for the
mass action, Akinlaja contends that deregulation
remains at the heart of the conflict. He said LASCO,
which is comprised of approximately fifty civil society
groups, the NLC, and the Congress of Free Trade Unions
(CFTU), is meeting around-the-clock to develop and
implement a mobilization strategy to meet the January
21 strike date. Despite LASCO's widespread support,
the Trade Union Congress (TUC), which includes the
Petroleum and Natural Gas Senior Staff Association of
Nigeria (PENGASSAN), has not agreed to participate in
the strike.

3. At the beginning of its mobilization efforts, the
NLC held several unorganized and poorly attended pre-
strike rallies on January 15. Akinlaja, who spoke at
an event in Ikeja, Lagos, told the audience that the
NLC has put in place a plan that will ensure that the
strike achieves its objectives. These objectives
include the call for the immediate lowering of the fuel
price back to the 34 naira per liter. Although
Akinlaja did not comment on why the turnout at the much-
publicized rally was unimpressive, he reiterated
labor's commitment "to give whatever it takes to force
government to accede to the NLC's demands." After the
event, Labspec asked several labor leaders to respond
to recent press reports that President Obasanjo had
sent a letter to the National Assembly on January 14
requesting that the fuel tax proposal be withdrawn from
consideration. These labor leaders contend that the
President's letter was merely designed to deceive
Nigerians. They also claim that Obasanjo is attempting
to distance himself from criticism while giving
Nigerians time to adjust to de facto implementation of
higher fuel prices.

4. Comment: Months of strike threats followed by
failed agreements between labor and the GON have taken
a toll on the Nigerian public, making people less and
less ready to answer labor's "mobilization" calls.
While most Nigerians bitterly oppose the fuel tax, they
are becoming less confident in the NLC's ability to
lead in these types of "quality of life" issues. NLC
leaders recognize that their credibility has been
severely damaged due to their decision to suspend
previous strike actions in favor of GON-NLC negotiated
agreements, which the GON has often failed to
implement. Desperately in need of a victory to sell to
its constituents, the NLC may choose to strike, no
matter what the GON does or does not do, merely to try
to send a message to Obasanjo that the organization is
still a major political player. However, since labor
is not prepared to sustain a strike and mobilization
has been relatively weak, cooler heads within LASCO may
choose to use Obasanjo's attempt to remove the fuel tax
to claim victory and call off the strike. This
scenario is even more likely since labor leaders have
told Laboff that they do not expect to win the battle
over deregulation. If the NLC decides to call the
strike, Nigerians may stay home from work for a time
but protests will likely be poorly attended,
unorganized, and short-lived. End comment.


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