August 22, 2012 / 5:08 PM / 8 years ago

UPDATE 1-Fuel shortages in Nigeria as union attacks subsidy halt

* Union wants release of subsidy payments to avert strike

* Presidential committee investigating fuel marketers

* Finmin says 25 firms fraudlently collected total $388 mln (Adds latest finance ministry comment)

By Chijioke Ohuocha and Tim Cocks

LAGOS, Aug 22 (Reuters) - Nigeria’s capital city Abuja suffered severe fuel shortages on Wednesday, as a trade union halted deliveries and threatened to cut supplies to the rest of the country by Friday unless the government resumes some subsidy payments it has withheld.

Fuel stations were closed throughout Abuja and black market traders toured the city with jerry cans selling gasoline for 50 percent more than the official price of 95 naira ($0.61) a litre.

Nigeria’s finance ministry said on Friday it will not pay fuel subsidies to importers currently being investigated for fraud by a presidential committee.

The ministry distributed a list of 25 local oil companies on Wednesday who it says collected a combined 61.33 billion naira ($388.29 million) in subsidy for fuel they never delivered.

“The information shows, some of the companies claimed payments for consignments brought in by ships which investigations revealed were either non-existent or were somewhere else in the world,” a Finance Ministry statement said.

Nigeria’s refined fuel workers’ union NUPENG threatened on Wednesday to shut down the fuel distribution network in Africa’s second biggest economy from Friday if the government did not release subsidy payments.

“The jobs of our 15,000 members can’t be jeopardised because of these non-payments,” NUPENG’s chairman for Southwest Nigeria, which includes the commercial hub Lagos, told Reuters by phone.

“Our members working with these marketers have not been paid for up to three months, yet the government is investigating the subsidy claims of last year and not this year.”

Nigeria is among the top 10 crude oil exporters in the world but due to decades of corruption and mismanagement it has to import most of its refined fuel needs.

A parliamentary probe in April uncovered a $6.8 billion scam in the fuel subsidy administration from 2009 to 2011, one of the biggest corruption scandals in Nigeria’s history.

It found that marketers were claiming subsidy for fuel they never delivered or that they sold to the country’s neighbouring states. Finance Minister Ngozi Okonjo-Iweala has this year been holding back subsidy payments while importers prove they have actually brought in fuel.

In a sign the strike might spread beyond fuel workers, the National Labour Congress (NLC), an umbrella union, told Reuters it supported the action.

“It’s really difficult for the marketers to pay the salaries of members ... The problem is the genuine people who import fuel are not being paid and this is not acceptable,” NLC President Chris Uyot said. “We expect the government to make concessions.”

The ruling People’s Democratic Party said on Wednesday corrupt oil marketers and their political collaborators were the driving force behind the NUPENG strikes and called on Nigerians to support the government.

“Why is it that the union who was in the vanguard of calls for sanity in the subsidy regime is now standing against government’s decision to ensure that transparency is taken to the letter?” a PDP statement said. “Is NUPENG running with the hare and chasing with the hound?”

In January, President Goodluck Jonathan tried to end the fuel subsidy, which economists say is wasteful and corrupt, but a week of NLC-led strikes and protests over petrol prices shut down the economy and forced him to partly reinstate it. ($1 = 157.9500 naira) (Additional reporting by Joe Brock in Abuja; Writing by Tim Cocks; Editing by Joe Brock and Anthony Barker)

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