Labour unions give Obasanjo ultimatum on fuel tax

Nigerian trade unions have threatened to call a fresh general strike on 21 January unless President Olusegun Obasanjo repeals a controversial new fuel tax within two weeks. Announcing the ultimatum on Wednesday, the Nigeria Labour Congress (NLC) said the 1.5 naira (US $0.01) per litre of fuel tax that came into effect on 1 January was illegal and unacceptable. The powerful NLC groups 29 blue collar unions covering both the public and private sectors. It include key unions in Nigeria's lifeblood oil industry. The NLC forced the government to back-track on a steep rise in petrol prices last year after it called an eight-day general strike at the end of June. Petrol prices have risen up to 12 percent since 1 January because the introduction of the new tax was accompanied by a further liberalisation of fuel prices. Petrol in Lagos now costs between 43 and 45 naira (43 and 45 US cents) per gallon. “Since we cannot bear this hardship indefinitely, we shall resume the general strike and protest within two weeks,” Adams Oshiomhole, president of the NLC told reporters. “The fuel tax is illegal because it lacks the necessary legislative backing for its enforcement. It's illegal for the government to insist that people pay taxes that are illegal,” he added. The tax was included in a budget appropriation bill sent to parliament in December. However, the government has ordered that the tax become effective from 1 January even though the legislature has yet to pass the bill into law. Several prominent legislators, including the Senate President Adolphous Wabara and Speaker of the House of Representatives Bello Masari have expressed opposition to the the tax. But Obasanjo insists that it is needed to raise funds for the maintenance and repair of the country’s decaying road network. Fuel prices rose last year by more than 50 percent after the government first abolished subsidies on imported fuel and later allowed prices to be determined by market forces under its economic deregulation programme. Most Nigerians see cheap fuel as one of the few benefits they have derived as successive regimes mismanaged the country’s oil riches. However Obasanjo is keen to abolish expensive state subsidies on fuel which have simply encouraged smuggling to neighbouring countries where prices are much higher. He also wants to raise domestic fuel prices to international market levels in order to facilitate the privatisation of Nigeria's decaying refineries, which are functioning at a fraction of their original capacity and are unable to meet domestic demand.