ABUJA (Reuters) ? President Goodluck Jonathan and labor unions failed in overnight talks to reach a compromise over the removal of fuel subsidies that has raised fears of a shutdown of Nigeria's oil industry, union and presidency sources said Monday.
Jonathan was expected to make a public address later on Monday and unions declined to comment until he had spoken.
Unions said Sunday that nationwide strikes and protests would resume Monday if no agreement was reached in Africa's second-largest economy and number one crude producer.
Oil unions have said they will shut oil output if talks reach deadlock - Nigeria accounts for 8 percent of U.S. oil imports and is also a key source for Europe and Asia.
But labor sources say that if another round is planned the unions are likely to keep oil flowing.
Global oil prices were boosted by Nigeria supply fears late last week and a serious production outage would push them sharply higher, according to traders and analysts.
Tens of thousands took to the streets for strikes over five successive days last week in protest against the sudden removal of a fuel subsidy on January 1 that more than doubled the pump price of petrol to 150 naira ($0.93) per liter from 65 naira.
Several people were killed in clashes with police last week and 600 were treated for wounds, according to the International Red Cross.
The government and unions had a first round of talks on January 12 and a second round two days later with both sides saying progress was being made but that more deliberations were needed.
Unions said they wanted the government to immediately bring the petrol price back down to 65 naira, at which point they would cancel strikes and protests and talks could continue.
PETROL PRICE
The government has been quiet on the details of negotiations, but slashing the pump price to 65 naira without any guarantee of subsidies being removed in the future would be a major climbdown.
Unions said the government appeared willing to reduce the petrol price but not to return it to old levels.
Workers had suspended strike action for the weekend because of talks and to allow protesters to rest.
Economists have said the subsidy needed to be removed because it was wasteful and open to corruption. Protesters have countered that argument by asking the government to work harder to tackle corruption and waste before removing public benefits.
Jonathan gave approval Sunday for an investigation.
Oil Minister Diezani Alison-Madueke said in a statement that she had written a letter to the Economic and Financial Crimes Commission inviting the regulator to investigate the subsidy procedure.
The state oil company NNPC and fuel regulators have come under fire for a lack of transparency and mismanagement from independent reports, including one by KPMG. Alison-Madueke pledged to review these reports.
She also said she would meet legislators in the next week to push forward progress on passing the wide-ranging Petroleum Industry Bill (PIB). The PIB has been locked in parliament for years, costing Nigeria billions of dollars in lost investment.
(Additional reporting and writing by Joe Brock)
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