North America

Nigerian Union Unrest May Cause Higher U.S. Gas Prices

According to AFP, weekend talks between Nigeria‘s government and union leaders were being held in hopes of averting an oil production shutdown that could cause the price of crude and gasoline in the U.S. to increase. Here are the details.

* The two main Nigerian labor confederations, Nigeria Labour Congress and Trade Union Congress, were present at the talk, continuing to demand that the government reinstate gas subsidies. The government had ended those subsidies without warning at the start of the year, causing the price of gas there to double over night and prompting thousands of people to protest, AFP reported.

* The Nigerian government has said that it needs the $8 billion a year that will be raised with the end of the subsidy in order to improve the country’s infrastructure.

* According to the AFP, the protests over the end of the gas subsidy have been largely peaceful throughout the country, though there are reports that police have shot at least two people in the city of Kano last week.

* Nigeria, an African nation of 160 million people, supplies eight percent of the U.S. oil imports, the Associated Press reports, and a continuing worker strike in that country could take 2.4 million barrels of oil off the market. Such a decrease in supply could cause gas prices to rise as much as 10 cents per gallon next week.

* According to the Associated Press, gasoline prices in the United States have risen 11 cents since the start of the year and now stand at an average $3.39 per gallon. Given this and other potential disruptions to the world’s oil supply, experts predict that 2012 could see the price at the pump at well over $4 per gallon.

* According to the U.S. Energy Information Administration, Nigeria is in the top five sources for United States crude oil imports, behind Canada, Saudi Arabia, Mexico and Venezuela. Oil imports from Nigeria were at 1,018 thousand barrels per day in 2010. As of November, they were at 826,000 gallons per day.

* A Friday news release from the EIA stated that 2011 was the first year that the prices of gasoline never fell below $3 per gallon. Prices were the highest in the West Coast region at a year average of $3.74 per gallon. Gasoline demand in the U.S. was about 4% lower in the fourth quarter of 2011 as compared to the same time the year before.

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