A soldier tried to disperse people protesting against the removal of fuel subsidies in Lagos, Nigeria, on Monday.  LAGOS, Nigeria — Nigeria swallowed a hard lesson on Monday that has been inflicted on governments of developing nations the world over for years: try cutting subsidies for gas and the populace will erupt in rage.  Faced down by thousands of demonstrators, demands for his removal and a weeklong general strike that paralyzed his fractious country, President Goodluck Jonathan abruptly gave in, partly restoring the fuel subsidy that — more than an Islamic insurgency in the north or a long-running conflict in the south — seemed to crystallize the frustrations of the people and draw them to the streets in outrage.  “Government appreciates that the implementation of the deregulation policy would cause initial hardships,” Mr. Jonathan said in a stiffly worded capitulation on Monday, after a week of refusing to back down.  Similar scenes have played out around the world in recent years, from Latin America to the Middle East to Asia, and the government response is frequently the same: give in quickly, despite the counsel of economists and international financial institutions that fuel subsidies are wasteful and distorting, sapping governments of money that could otherwise be used to improve education, public health or other needs.  The Nigerian government spends about $8 billion a year on fuel subsidies, and getting rid of them would be “an important first step” to shoring up the finances of one of Africa’s largest economies, according to a 2009 International Monetary Fund report.  But in resource-rich countries like Nigeria, with its enormous gap between rich and poor, subsidized gas is one of the few benefits trickling down from an infamously corrupt government that has pocketed billions of dollars in oil profits, with little to show for it.  For the poor — and three-fourths of this country’s population lives on about a dollar a day — the fuel subsidy means a cheap ride to the market. It means lower prices for the food they buy there. And it means some sense of ownership in a national resource, oil, in which roughly 80 percent of the economic benefit has flowed to 1 percent of the population, according to some estimates.  “It’s one of the few ways the urban and rural poor feel they benefit from this strategic resource,” said Michael J. Watts, an expert on the politics of oil at the University of California, Berkeley. “The fuel subsidy is experienced as one of the few things they get.”  That sentiment was strongly in evidence as the protests dwindled here on Monday. Under the rollback union leaders agreed to, gas in Nigeria will drop to about $2.27 a gallon from about $3.50 — higher than the $1.70 price before Jan. 1, but low enough to end the strike.  Still, many Nigerians were disappointed that Mr. Jonathan had not dropped the price all the way back down.  “We are not benefitting from this oil!” shouted Ali Mohammed, a motorcycle-taxi driver. “No lights, no roads, no hospitals. Make him reduce the price. We are suffering in this country.”  Hundreds of other young men milled about close by in what has been a center of the protest here: the New Afrika Shrine nightclub of the Afro-beat star Femi Kuti, son of the Nigerian musician and dissident Fela Kuti.  In a speech Monday morning, Mr. Kuti both incited and calmed the crowd listening at his feet amid clouds of marijuana smoke, expressing disgust with Nigeria’s institutions from his rickety wooden stage as supporters murmured their approval.  Later in his office, Mr. Kuti shouted at his television as he watched the labor leaders announce the end of the strike. “I told you those people would back down,” he said to his aides, looking up from the screen. As for the government, he said, “They prosecute people for being gay, but there is no law against stealing 14 million.”  Nigeria has seen similar tumult over the issue in the past, and it is hardly alone. In Bolivia, protesters burned photos of President Evo Morales and vandalized government buildings in December 2010, forcing Mr. Morales to withdraw his subsidy-cutting measure only days after introducing it.  In Venezuela, before the rise of Hugo Chávez, days of riots and hundreds of deaths followed a fuel price rise in 1989. President Chávez now controls one of the world’s most generous fuel subsidies, despite being critical of it.  In Jordan, an announcement last year that subsidies would be lifted helped inspire antigovernment demonstrations that forced a reversal. In Indonesia, a 30 percent increase in fuel prices in 2008 led to bloody rioting. Economists nonetheless praise that country for doing what others often do not: sweetening subsidy removal with cash programs that aid the poor.  Ethan Bronner contributed reporting from Jerusalem, Rick Gladstone from New York and Simon Romero from Rio de Janeiro.
The abrupt removal of the fuel subsidy had been seen as one more act of insensitivity by a government the protesters criticized for favoring the wealthy.