Strikes hurting Nigerian oil economy

ABUJA, Nigeria, Jan. 13 (UPI) -- Nationwide strikes in oil-rich Nigeria could wind up costing the country as much as $1 billion dollars a day, an investment analyst said.

Strikes in Nigeria have dragged on for nearly a week. Protesters and labor unions are upset with a decision by Nigerian President Goodluck Jonathan to end a fuel subsidy that was in place for nearly four decades.

Unions, including the country's oil union Pengassan, said they planned to shut down the country's oil production during the weekend if the government didn't budget on the dispute over fuel subsidies.

Trade groups said Friday they'd suspend their protests in order to continue their talks with the government, the BBC reports.

Prices for gasoline escalated in Nigeria, where most of the population survives on close to $1 per day. Jonathan's government, however, said it couldn't afford to keep the subsidy in place. The savings, he said, would go toward energy and other infrastructure in the country.

Continued strikes, however, could wind up costing Nigeria more than $1 billion a day, Gregory Kronsten, a macroeconomic researcher at FBN Capital Ltd. in London, told the Bloomberg news service.

Nigeria generates about 80 percent of its income through oil sales. Ongoing terrorist activity attributed to Islamic group Boko Haram is compounding the security situation in Nigeria.