Oil: Nigeria's blessing and curse

Oil thefts have lead to catastrophic fires

Oil may be Nigeria's main source of revenue, but it also underlies much of the country's strife.

Protests over price rises, theft from pipelines, and violence directed at oil companies are all symptoms of the inequitable distribution of the country's most valuable natural resource.

The price of petrol and diesel has long been one of Nigeria's hottest political issues.

The country has large oil reserves and its production costs are low, so Nigerians have come to see very cheap petrol as their right.

The Delta's people have seen little of the region's oil wealth

Every attempt to raise the price has brought angry reaction on the streets.

But every barrel sold to the local refineries for $9.50, is one barrel less for export at a world price now nudging $28.

Smuggling

So cheap is the pump price in Nigeria that vast quantities are smuggled across the borders into neighbouring countries.

And the combination of this smuggling and the country's creaking refineries has meant that the Nigerian Government has been having to pay world prices to import refined products to make up the shortfall.

A situation where petrol is plentiful, yet unavailable has also prompted citizens to grab what they can get for free, by tapping the pipelines illegally.

This has resulted in catastrophic fires which have left hundreds dead.

Resentment

In the main oil-producing region of the Niger Delta, there is a particularly sharp sense of injustice, as the region remains poor and under-developed despite the wealth generated by oil wells.

Environmental damage has added to the region's problems.

It was this situation that gave rise to one of the most notorious abuses by Nigeria's former military government, which in 1996 ordered the execution of the writer Ken Saro-Wiwa and other activists campaigning for the rights of the Delta's Ogoni people.

The advent of democracy has done little to ease tensions in the Delta. Local youths have repeatedly sabotaged oil plants and taken employees hostage.

In one of the most serious incidents, 12 policemen were murdered - prompting President Olusegun Obasanjo to send in the army. The military operation left the town of Odi all but destroyed.

The president has promised to put a high priority on addressing the grievances of the Delta's people.

But the new democratic order has allowed for a more open expression of popular concerns all over the country - bringing the government into direct conflict with the trade unions over the price of petrol.