(Adds comment from military spokesman)
By Nick Tattersall
LAGOS, May 26 (Reuters) - Rebels from Nigeria's oil-producing Niger Delta said they had blown up a Royal Dutch Shell <RDSa.L> pipeline and killed 11 soldiers in a firefight on Monday, but the army denied losing any men.
The rebel Movement for the Emancipation of the Niger Delta (MEND) said in an emailed statement that it had sabotaged the Shell pipeline at Awoba flow station in southern Rivers state in the early hours of Monday morning.
"Today's attack is dedicated to the administration of (President) Umaru Yar'Adua and (Vice President) Goodluck Jonathan who have failed after one year in office to ensure peace, security and reconciliation in the Niger Delta region," the MEND statement said.
Shell in Nigeria said it was investigating and had no immediate comment.
Nigeria's army initially denied there had been an attack but later confirmed there had been a blast early on Monday at a Shell facility close to Awoba which was not guarded by soldiers.
"The cause of the explosion has not yet been determined but it is strongly suspected that explosives might have been used by miscreants," Sagir Musa, military spokesman in Rivers state, told Reuters.
Musa said troops had been sent to the site of the blast but denied that 11 soldiers in a military gunboat had been killed in a shoot-out.
The Niger Delta is home to the world's eighth-biggest oil industry, exporting about 2.1 million barrels per day, but rebels have led a campaign of sabotage since early 2006 to push demands for greater local control over oil revenues.
The unrest has depressed Nigerian output by around a fifth since then, helping to push world oil prices to record highs. Oil rose above $133 a barrel on Monday after striking a record high of $135.09 last week.
A new government in Nigeria led by Yar'Adua and Jonathan, a native of the delta, took office on May 29 last year promising to address the root causes of the violence in the Niger Delta and to negotiate with the militants.
But attacks on oil installations and the kidnapping of oil industry workers have continued in the region, with MEND last week accusing the government of "insincerity" in its handling of the situation.
Shell was forced to shut in about 164,000 barrels per day of Bonny Light crude production -- or about 40 percent of the Anglo-Dutch major's equity oil output in Nigeria -- late last month due to militant attacks in the delta.
The company has been restoring some of the shut-in production but a force majeure remains in place for Bonny Light exports, meaning it cannot guarantee to meet its contract commitments. (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ ) (Additional reporting by Austin Ekeinde in Port Harcourt, Writing by Nick Tattersall; Editing by Matthew Jones) ((Reuters messaging: nicholas.tattersall.reuters.com@reuters.net, Lagos Newsroom +234 1 463 0257))
Keywords: NIGERIA DELTA/ATTACK
(Refiles with additional codes)
By Jason Subler and Ahmad Pathoni
SINGAPORE/JAKARTA, May 26 (Reuters) - Leaders across Asia are starting to give in on the prickly issue of fuel subsidies, hiking prices in the face of $130 a barrel oil, but careful calibration of the steps may allow them to get away with it.
Indonesia jacked up fuel prices by an average of 28.7 percent from Saturday, Sri Lanka followed with its own increase on Sunday and Bangladesh said it planned an increase soon.
India is also considering such a move. The odd man out is China, which has strong finances and has said it does not plan to raise prices soon.
(For a graphic on world petrol prices, see: https://customers.reuters.com/d/graphics/Petrol_prices.gif)
While the increases will be difficult to swallow, especially for governments with approaching elections such as India and Indonesia, social disruptions such as those seen due to food shortages will probably be avoided, analysts said.
For one thing, fuel does not have the same impact with lower-income people as food.
"Food is so immediate and obvious," said Steve Wilford, India country manager for consulting firm Control Risks.
"In countries that have a recent memory of famine ... it's such an emotive subject that governments can't ignore the immediate impact of rapid food price hikes in the same way as they can with fuel price hikes."
In addition, accompanying the hikes with mollifying steps can cushion the blow.
Indonesia has twinned the fuel price hikes with some $1.5 billion in cash handouts for the poor.
India may try to limit increases in prices for fuels used by the poor, such as kerosene, while also not giving too big a hit to middle-class voters through dearer gasoline, said Wilford.
Some policymakers are also aided by an awareness among their populations of the reality of sky-high global prices.
LESSER OF TWO EVILS
That is generally the case in Taiwan, which has said it will end a freeze on prices of fuels and utilities on June 1, said Raymond Wu, managing director of Taipei-based political risk consulting firm e-Telligence.
"These utility price hikes are expected, from cement to food, so people psychologically are expecting an increase," Wu said.
Still, the potential impact on elections will prompt governments such as in India and Indonesia to tread very carefully, weaning their economies off subsidies only bit by bit.
"Once given, these kinds of subsidies are extraordinarily difficult to take away," Wilford said.
The issue of fuel subsidies has proved tricky for the Indonesian government ahead of next year's parliamentary and presidential elections, highlighted by the protests in the run-up to the policy move.
President Susilo Bambang Yudhoyono sought on Monday to ease people's concerns.
"The alternative would be a possible financial and economic crash similar to that of 1997, and the real loser here would be our own people," Yudhoyono told an investment forum.
While a threat by some legislators to impeach Yudhoyono on account of the decision was just "empty talk", it was dividing his ruling coalition, said Arbi Sanit, a political analyst at the University of Indonesia.
"If SBY failed to restore the unity of the coalition, it would jeopardise his chances for re-election," Sanit said.
Still, some analysts said that the fuel price increase was unlikely to trigger social unrest in Indonesia, even though it comes on top of rapid increases in food prices and other goods.
"Even though the people reject the fuel price increase, I don't see signs people want to make things worse," said political analyst Fachry Ali, noting that the latest increase was moderate in comparison to a rise of more than 100 percent in October 2005.
"Nothing happened then, so it will be all right now."
MOUNTING COSTS
To be sure, raising fuel prices will come at a cost.
Though Taiwanese citizens would generally accept the fuel price rises, they would probably put the administration of freshly-inaugurated President Ma Ying-jeou under more pressure to deliver on his election promises of better economic links with China, said Wu.
The pick-up in inflation that results from lowering subsidies will also probably force central banks to increase interest rates, analysts say, just at a time when weakening global demand already threatens to sap growth.
But inaction could have an even greater cost, as it would contribute to the growing current account and fiscal deficits in countries such as India, putting further downward pressure on their currencies.
The cost of sinking so much money into fuel subsidies could drag significantly on countries like India, where significant investments are needed to improve education and infrastructure, said Wilford.
"Those kind of issues are just not getting the money they should be getting, because it's all going to prop up the price of fuel," he said. (Additional reporting by Nidhi Verma in New Delhi, Ralph Jennings in Taipei and Telly Nathalia in Jakarta; Editing by David Fox) ((jason.subler@thomsonreuters.com; +65 6870 3818)) Keywords: ASIA SUBSIDIES/
(Changes attribution, adds details on oil)
HANOI, May 26 (Reuters) - Vietnam estimated its trade deficit in the first five months of the year would be $14.4 billion, more than three times higher than in the same period last year after a jump in imports, the government said on Monday.
January-to-May imports would rise 67 percent to $37.8 billion while exports would only rise 27.2 percent from the first five months of 2007 to $23.4 billion, the General Statistics Office said in its monthly report.
Global oil prices have surged this year, inflating Vietnam's energy import bill. The government report said the country would spend $4.9 billion for oil products in the first five months, a surge of 68.7 percent from the same period last year.
Vietnam had a trade deficit of $4.23 billion in the first five months of 2007.
Rice exports are estimated to reach 2.1 million tonnes after the first five months, up slightly from 1.87 million tonnes shipped in the same period last year, while rice earnings would nearly double to $1.17 billion thanks to higher global prices.
The five-month import value of equipment and machines would jump 42.5 percent to $5.7 billion, the government said.
January-May's crude oil exports would rise 45 percent from the same period last year to $4.52 billion, the government said.
It estimated exports this month would reach $5.15 billion while imports would be $8 billion, leaving the monthly deficit at $2.85 billion, compared with an actual deficit of $3.22 billion in April.
Last month, Planning and Investment Minister Vo Hong Phuc told a National Assembly committee that exports were projected to rise 37 percent to $83 billion this year, above the government's initial forecast of between 20 and 25 percent.
Phuc said the annual trade deficit would widen to $30 billion, compared with an Industry and Trade Ministry forecast of $20 billion early this year. (Reporting by Ho Binh Minh, Editing by Jacqueline Wong)
((ho.minh@reuters.com; +844 825 9623; Reuters Messaging: ho.minh.reuters.com@reuters.net)) Keywords: VIETNAM ECONOMY/TRADE
(Adds army denial of attack)
By Nick Tattersall
LAGOS, May 26 (Reuters) - Rebels from Nigeria's oil-producing Niger Delta said on Monday they had attacked a Royal Dutch Shell <RDSa.L> pipeline and killed 11 soldiers, but the army denied there had been any attack.
The rebel Movement for the Emancipation of the Niger Delta (MEND) said in an emailed statement that it had sabotaged the Shell pipeline at Awoba flow station in southern Rivers state in the early hours of Monday morning.
"Today's attack is dedicated to the administration of (President) Umaru Yar'Adua and (Vice President) Goodluck Jonathan who have failed after one year in office to ensure peace, security and reconciliation in the Niger Delta region," the MEND statement said.
Nigeria's army denied there had been an attack while Shell in Nigeria said it was investigating and had no immediate comment.
"The (rebel) claims are mischievous lies deliberately told to gain popularity and mislead the people ... There was no attack on the facility and none of our soldiers were killed," Sagir Musa, military spokesman in Rivers state, told Reuters.
The Niger Delta is home to the world's eighth-biggest oil industry, exporting about 2.1 million barrels per day, but rebels have led a campaign of sabotage since early 2006 to push demand for greater local control over oil revenues.
The unrest has depressed Nigerian output by around a fifth since then, helping to push world oil prices to record highs.
A new government led by Yar'Adua and Jonathan, a native of the delta, took office on May 29 last year promising to address the root causes of the violence and to negotiate with the militants.
But attacks on oil installations and the kidnapping of oil industry workers have continued in the region, with MEND last week accusing the government of "insincerity" in its handling of the situation.
Shell was forced to shut in about 164,000 barrels per day of Bonny Light crude production -- or about 40 percent of the Anglo-Dutch major's equity oil output in Nigeria -- late last month due to militant attacks in the delta.
The company has been restoring some of the shut-in production but a force majeure remains in place for Bonny Light exports, meaning it cannot guarantee to meet its contract commitments. (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ ) (Additional reporting by Austin Ekeinde in Port Harcourt, Writing by Nick Tattersall; Editing by Matthew Jones) ((Reuters messaging: nicholas.tattersall.reuters.com@reuters.net, Lagos Newsroom +234 1 463 0257))
Keywords: NIGERIA DELTA/ATTACK
PORT HARCOURT, Nigeria, May 26 (Reuters) - Nigeria's army on Monday denied a claim by rebels in the oil-producing Niger Delta that they had attacked an oil pipeline belonging to Royal Dutch Shell <RDSa.L> and killed 11 soldiers in a gunbattle.
"The (rebel) claims are mischievous lies deliberately told to gain popularity and mislead the people ... There was no attack on the facility and none of our soldiers were killed," Sagir Musa, military spokesman in Rivers state, told Reuters. (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ ) (Reporting by Austin Ekeinde; Writing by Nick Tattersall) ((Reuters messaging: nicholas.tattersall.reuters.com@reuters.net, Lagos Newsroom +234 1 463 0257))
Keywords: NIGERIA DELTA/ATTACK ARMY
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