Nigerian unions reject government offer

Nigerian union leaders are set to continue their national strike after negotiations with government officials hit a stalemate on the weekend.

The unions said the strike will be called off as soon as an acceptable price level has been reached, however on Saturday they rejected the government's compromise on fuel price rises and were pressing on with the shut down.

The union action was triggered by an almost 50% increase in fuel prices, from 26 naira to 40 naira, announced last month by President Obasanjo who claimed that it was essential for Nigeria's economy to reduce subsidies on imported refined fuel.

Currently the country spends around $2 billion per year on imported fuel products, money the government says could be spent on key services such as health and education.

Nigeria's four aging refineries cannot meet domestic demand, meaning the OPEC member state has to import fuel to meet the shortfall.

The strike comes just days before a visit by US President George Bush to the country.