Nigerian anger at 'criminal' price hike

LAGOS - Nigeria's trade union federation has said it will resist what it calls the "criminal" 67% rise in the petrol price, as fuel subsidies are removed.

The government announced on Wednesday that the price was to increase in a bid to ease crippling fuel shortages.

The Nigeria Labour Congress (NLC) said the rise from 86.5 naira ($0.43) a litre to 145 naira should be reversed.

In 2012, the government was forced to back down on a similar price rise after nationwide protests.

The subsidy, which has kept the price low, costs the government $2.7m a day and there is no provision for it in the recently approved budget for this year, the petroleum ministry said in a statement.

Recent fuel shortages have seen Nigerians paying up to 350 naira a litre on the black market, it added.

The subsidy has also encouraged corruption with the government often paying for more fuel than Nigerians use, says oil analyst Neil Ford.

Despite being one of Africa's largest oil producers, Nigeria has to import fuel to meet demand as its refineries are dilapidated and work at a fraction of their capacity.

Petroleum Minister Emmanuel Ibe Kachikwu said that the price rise should stabilise the market and help end the fuel scarcity.

But "even with the new price regime, Nigeria would remain one of the cheapest fuel markets in Africa," he added.

He also argued that increased competition in the sector will drive prices down.

One of the reasons behind the scarcity has been the shortage of US dollars held by the central bank that importers could use to buy the refined fuel.

As well as dropping the subsidy, the government has announced that importers can now buy dollars from other sources.

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