(Image source: Vanguard)

BY STEVEN SPARKMAN

ANCHOR LAUREN ZIMA

After more than a week of mass protests and strikes that ground the country to a halt, Nigeria’s labor unions and government have reached a tentative compromise. Euronews has the government’s move.

“Nigerian president Goodluck Jonathan has performed a major u-turn by announcing that petrol prices will be reduced after five days of mass protests.”

Fuel prices more than doubled after the removal of the 38-year-old subsidy on January 1. The new price will be a more modest increase -- around 50% higher than the old price. That falls short of demands by labor unions for a full reinstatement of the subsidy.

But CNN reports, it was enough to end mass action for now.

“Labor union leaders are temporarily halting the protests that threatened to shut down Nigeria’s oil production.”

The government has argued the subsidies are wasteful, and only benefit a few fuel importers. They’ve also been under pressure from the International Monetary Fund to deregulate their oil industry.

Al Jazeera explains the government’s case.

“The government’s argument to the Nigerians is that they’re wasting a lot of money. They could save up to about $8 billion U.S. dollars a year from these subsidies, and these go to developing the economy, the infrastructure, and just basically uplifting the life of the country’s poorest.”

The problem is removing the subsidy meant a sudden shock to an already impoverished population, with food prices doubling at the rise in fuel costs. Many Nigerians also believe the money from the subsidy won’t actually go to those services, and will instead be siphoned off by a corrupt elite.

The Christian Science Monitor quotes one protester, saying...

"What Nigerians are calling for is good government … We are actually not against the idea of removing the fuel subsidy … But we have heard this story before ... We've had promises from past governments, yet we still have a poor educational system, no roads, and no electricity...”

The army and police have been deployed to try to stop any more demonstrations. The government and labor unions are expected to resume negotiations.