2 Jan 2012

Nigeria to remove fuel subsidies

7:07 pm on 2 January 2012

The Nigerian authorities have announced a plan to scrap subsidies on the price of imported fuel.

The subsidies, which cost the country $8 billion a year, keep the price of fuel low and their removal will cause a sharp rise in prices.

Labour unions have called for "mass protests".

The BBC reports that many Nigerians regard cheap fuel as the only benefit they get from the nation's oil wealth.

Nigeria is Africa's biggest oil producer but most of the available 2 million barrels per day are exported in an unrefined state.

The country lacks refineries and infrastructure so has to import refined products such as petrol, which is expensive.

Nigerians are heavy users of fuel, not just for cars but to power generators that many households and businesses use to cope with the country's erratic electricity supply.

Petrol prices in Nigeria are currently very low by international standards at $0.40 per litre.

Previous attempts to end the subsidies in Nigeria have prompted industrial action and street protests.