LAGOS (Reuters) - Police shot dead one protester and wounded nearly two dozen as thousands of Nigerians demonstrated against the axing of fuel subsidies in Africa's top oil producing nation on Monday and unions launched an indefinite nationwide strike.
Police also fired live ammunition and tear gas to disperse a crowd of protesters in the northern city of Kano, wounding at least 18 people, the Red Cross said.
Angry residents in Ogba, a rundown iron-roof suburb of the main commercial city of Lagos, where the man was shot dead, said police had fired on a crowd to disperse it.
At the hospital, where the man's body had been transferred to the mortuary, three protesters lay waiting to be treated for gunshot wounds to the leg, a Reuters reporter there said.
"There were about seven policemen shooting in the air to try to disperse protesters ... The DPO (police chief) opened fire targeting these four people and shot them," said Dickson Oracle, who witnessed the shooting in Ogba.
"One died on the spot because he sustained serious bullet wounds and the remaining have been brought to the hospital."
Shops, banks and petrol stations were shut in Lagos, and the network of highways and bridges stretching over its wide lagoon, usually clogged with traffic at all hours, were empty.
Production of Nigeria's average two million barrels of crude oil a day carried on as normal despite the strike, sources at two international oil companies and the state firm told Reuters.
Earlier, thousands of people gathered outside Labour house, in Yaba, the downtown market area of Lagos, waving union flags, from where they started marching and shouting "solidarity forever", closely watched by armed police in riot gear.
Some of them blocked the road with burning tyres and waved placards challenging the record of President Goodluck Jonathan, whose presidency is already under pressure from an increasingly violent Islamist insurgency in the north of the country.
Jonathan has said he will not back down and the strikes will
test his resolve. Strikes have forced previous governments into u-turns on fuel subsidy cuts.
Nigeria's fuel regulator announced the end of the subsidy from January 1 as part of efforts to cut government spending and encourage badly needed investment in local refining.
Economists say the subsidy filled the fuel tanks of the rich and middle classes at the expense of a poor majority living on less than $2 per day, fed corruption and siphoned off billions of dollars of public funds to a cartel of fuel importers.
Removing it, sending the price of a litre of petrol up overnight to about 150 naira from about 65 naira, is a flagship policy of Jonathan and his economic management team.
"It was 25 percent of total expenditure in the budget, the single biggest item - more than education, health and agriculture combined," said Bismarck Rewane, chief executive of Lagos-based consultancy Financial Derivatives. "As long as they spend the money right, removing the subsidy has to be good."
Nigerians' anger over the cut, which has united poor market traders and middle class motorists alike, is further straining Jonathan's presidency, already facing criticism for failing to contain the Boko Haram Islamists in the north.
On Sunday he accused some within his own government of backing them, saying they had created a situation worse than the 1960s civil war that killed a million people.
The government says it would be economic suicide to give in.
"Deregulation is inevitable to save the Nigerian economy, to ensure transparency and competitiveness in the downstream sector of the petroleum industry and safeguard the future of Nigeria," presidential spokesman Ruben Abati told Reuters by phone.
In the capital Abuja, thousands gathered under tight security, some in cars adorned with labour union flags.
"What is happening is an injustice. I voted for Jonathan but he has disappointed me," said Michael Uche, 32, a bodyguard, after checking the Twitter feed on his Blackberry for the latest on the protest.
He complained that when he tried to fill his car on Sunday it was 200 naira a litre, so he could only buy two litres.
Oil workers said production in Nigeria's oilfields continued uninterrupted, as many had predicted.
"There's no impact on oil production yet. We're not anticipating any problems," said one official at a major oil company, who asked not to be named. A spokesman for the state oil firm also said production was normal.
In Yenagoa, in the southeastern Niger Delta, a heavy police presence prevented demonstrators from protesting. In nearby Port Harcourt, hundreds gathered, hemmed in by police patrol vans.
In parts of the north and centre covered by a state of emergency to fight Boko Haram, streets were deserted.
The lower house of parliament urged unions and government to back down on Sunday, but unions have refused.
Many Nigerians see cheap fuel as the only tangible benefit they derive from an oil-rich state where corruption bleeds billions of dollars from state coffers.
Critics say wealthy politicians could have found savings within government first and tackled oil industry corruption.
Despite its huge oil wealth, Nigeria is forced to import costly refined fuel because it lacks its own capacity.
It is hoped the new pricing regime will prompt investment to
reverse disrepair of refineries, after decades of mismanagement.
The subsidy has also encouraged smuggling into neighbouring nations such as Benin and Cameroon where fuel is more expensive.
The government estimates it will save 1 trillion naira this year by eliminating it.