Lagos  (Platts)--25Jun2007

Nigerian President Umar Yar'Adua said Sunday his administration would
accord top priority to boosting local production of petroleum products and
ending the country's nearly 100% reliance on fuel imports.
     The statement came after trade unions this weekend agreed to halt a
crippling general strike called to protest increased gasoline prices.
     The government said last week that subsidies on fuel prices have risen to
Naira 750 million/day ($6 million/day), forcing it to raise gasoline prices by
15%, a move that triggered the four-day strike.
     In Sunday's statement, the President said the sharp increase in subsidies
on domestic prices of petroleum products was due to the "near-total reliance
on imported petroleum products in spite of our status as one of the world's
biggest exporters of crude oil." 
     Nigeria produces more than 2 million b/d of crude, but imports most of
its petroleum products following the breakdown of the four state-run
refineries with a total capacity of 445,000 b/d.
     Calling the situation "totally unacceptable," the President pledged to
give "urgent attention to re-establishing and boosting domestic refining
capacity and rehabilitating the country's pipelines network, damage to which
has severely restricted the operations of the country's refineries in recent
years and hindered the distribution of petroleum products," the statement
said.
     Yar'Adua will also create an "action plan" to resolve the "longstanding
question of government subsidies on the domestic prices of petroleum
products." Overall, cuts in public spending have helped push the country's
inflation rate down, the National Bureau of Statistics said Monday, according
to AFP.
     Inflation dropped to 6% in the 12 months ending in May, compared with
6.5% the previous month, the report said.