On January 1 Nigerians woke up to the news that the price of fuel had effectively doubled. Fuel subsidies had been abolished. Like many Nigerians, Yemi Folarin found himself paying 4,200 naira ($26, 20 euros) for 30 litres of fuel. Two days earlier, he had paid just 2,000 naira, less than half, for the same amount. He told Deutsche Welle he was worried the ensuing increase in transport costs was going to have a "knock-on effect on the cost of food."

Babatope Babaloi, coordinator of the activism group Movement for Revolutionary Change, says the price of imported petroleum will now be determined by the value of the naira.

"If this new astronomical increase is not challenged," he told the German news agency dpa, "the common man is doomed to suffer from new prices increases every two weeks."

Most Nigerians subsist on less than two dollars day, but government spent more than eight billion dollars on fuel subsidies in 2011. The abolition of these subsidies is part of an effort to curb public spending, with the government saying the money saved would be diverted to other sectors of the economy.

Petroleum minister Diezani Alison-Madueke has been raising hopes of more funding for maternal and child health services, public works, and employment programs for women and young people.

President Goodluck Jonathan has been defending the subsidies' abolition saying it will unlock capital required for the development of infrastructure.

But there are fears the money will simply seep away and that the impact on Nigerian society will be catastrophic. Sule Magaji, an economist and deputy director of the University of Abuja told Deutsche Welle that poverty was now guaranteed in Nigeria. "Nobody is confident that whatever money is saved from the subsidies is judicially going to be used to better the lives of ordinary Nigerians," he said.

Unions are outraged

Unions, including the Nigerian Labor Congress, which calls the price hike "a bad New Year gift," have called for protests in the coming days. "We shall neither surrender, nor retreat," two unions said in a joint statement.

Tolu Ogunlesi works for the Nigerian youth movement Enough is Enough. He says his organization will join forces with others to resist the abolition of fuel subsidies.

"Over the next few days we will unveil our own plans, but we will also keep an eye on what other labor and civil society organizations are doing so we can all sort of unite," he told Deutsche Welle.

In Lagos angry mobs have been going from gas station to gas station telling owners not to sell fuel at the higher prices. Outside one outlet, protestors lit a bonfire forcing drivers to turn round. Police were reported to have fired tear gas at small group that were burning tyres. Earlier a couple of hundred people joined a protest and the participants included prominent human rights activists and Seun Kuti, son of the late legendary musician and activist Fela Kuti.

Price hike adds to Nigeria's woes

The unrest over rising prices is adding to Nigeria's security woes. President Jonathan has already declared a state of emergency in parts of the country hit by Islamist insurgency.

He was responding to attacks attributed to the group Boko Haram, in particular to bombings over Christmas that killed 49 people, most of them in a gruesome blast at a Catholic church as services were ending.

The fuel price hike is likely to result in even higher prices in the landlocked and violence-plagued north of the country, because Nigeria's refined oil is mainly imported through ports in the south.

Nigeria, itself an oil producer and OPEC member, delivers about 2.4 million barrels of crude a day. In spite of this natural resource, it imports virtually all of its petroleum products. Nigeria's own refineries have been marred for years by graft, mismanagement and violence.

Nigeria's Petroleum Products Pricing Regulatory Agency announced it was stopping the subsidy on fuel to petroleum importers on Sunday. Previous attempts to tamper with the subsidy over the last two decades have met with nationwide protests. In these uncertain times Nigerians evidently see it as a rare government perk they do not wish to lose.

Author: Mark Caldwell (dpa/AFP/AP with additional material from Sam Olukoya in Lagos)
Editor: Susan Houlton / rm