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Nigeria Suspends Gasoline Tax

American Government Special Collections Reference Desk

Automotive Africa

Nigeria Suspends Gasoline Tax

Nico Colombant
January 20, 2004

Nigeria's government has suspended a controversial tax on gasoline, following an order by a judge who said he wants to hold hearings on the legality of the tax. The court also said a planned national strike to protest the tax should be postponed, and union officials indicated they would comply.

A statement issued by Nigeria's federal government says it accepts the court's order to stop collecting a tax of about one cent on each liter of gasoline sold in Nigeria.

The government statement says the tax will be suspended while the court considers the issue.

The tax, which the government says is needed to pay for highway maintenance, took effect on January 1.

Labor union leaders were angry, saying gasoline prices should be kept low in oil-rich Nigeria. They planned a general strike against the tax, which was to begin at midnight Tuesday.

But the Abuja appeal court also ruled that the planned strike needs to be suspended. The court says it will meet next Monday to begin hearings on the dispute.

Union leaders say the fuel tax is illegal because it has not been discussed with lawmakers. The government took the matter to court, arguing the strike should not be allowed because it has nothing to do with working conditions.

Union leaders have been complaining of rising gasoline prices since last year, when the government ended fuel subsidies.

The government says the new tax and rising prices are part of efforts to make Nigeria's large oil sector more efficient. Nigeria is one of the world's top 10 producers of crude oil, but it still needs to import most of its gasoline because of poor refineries.

The government is also trying to curb the smuggling of gasoline into neighboring countries, where prices are higher than in Nigeria.

A previous strike over gasoline prices ended in July with an agreement to cap the price of a liter of gasoline at about 25 cents. But prices have risen to more than 35 cents.

Many Nigerians believe they should continue to have access to cheap gasoline because their country's oil wealth has done little else to improve their economic situation during the past three decades.

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