Nigeria 'will end petrol subsidies'

President Obasanjo: Pursuing difficult reforms

The Nigerian Government is determined to remove subsidies on petroleum products as part of reforms of the energy sector, President Olusegun Obasanjo has said.

In a live televised discussion programme, he said that the present subsidy "does not make sense" as it failed to benefit the majority of Nigerians.

In this country, the price of coca cola is higher than the price of petrol. The subsidy, if removed, will be available to do other things

President Obasanjo

He said the government would instead subsidise education, health and water services.

Labour organisations have threatened to strike if the government goes ahead with the deregulation plans it announced last week, which would see oil refineries in Nigeria pay international market prices for crude oil.

Nigeria suffers persistent fuel shortages despite being the world's fourth largest oil producer.

"In this country, the price of coca cola is higher than the price of petrol. The subsidy, if removed, will be available to do other things," he said.

He also condemned the widespread smuggling of petroleum products to neighbouring countries, where they are sold at prices up to three times higher.

Corruption and Biafra

He also said he would have acted faster to root out corruption if he had realised just how bad things were when he came to power in May 1999.

He gave the example of the board of the inefficient state-run electricity company, Nepa, which he sacked last year. Locals say the acronym stands for: Never Expect Power Always."

President Obasanjo also signaled a continuing tough stance towards Nigerians campaigning for a breakaway state in Biafra - which sparked a civil war more than 30 years ago.

He said that those calling for an independent state in Biafra were efectively waging war on Nigeria.

An estimated one million people, mostly Ibos, died in the 30-month civil war that followed Biafra's attempt to secede.