Nigerian labour unions said they would resume nationwide strikes on Monday, crippling the second largest economy in Africa, after failing to reach a compromise with the government over scrapped fuel subsidies.

However, the main oil union said it would maintain the output of Africa's No. 1 crude producer, not joining walkouts for the time being, and the government said more talks would be held on Sunday despite the unsuccessful round the day before.

There will be further negotiations today. The government is still open for dialogue. Further consultations will carry on today and by the evening something definite will have to come out, presidential spokesman Reuben Abati told Reuters.

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 litre from 65 naira.

We are suffering, shouted Paul Edem, after queuing for 12 hours to buy petrol at the new higher price in Lagos, Nigeria's largest city. The only alternative to queuing is to buy at three times the new price from touts selling from jerry cans.

We are stocking up as they say the strike will resume tomorrow, said Zainab Aruna, a housewife at Sura market nearby. Government should reinstate the subsidy so that the protests will end, she added to a chorus of approval from bystanders.

The Nigeria Labour Congress (NLC) and Trade Union Congress said in a statement: The indefinite strikes, rallies and protests continue nationwide from Monday, but added that they were ready for more talks without conditions.

However, in a possible move to coax concessions from the government, NLC President Abdulwaheed Omar said PENGASSAN, the oil workers union, will not shut down oil production, as earlier planned for Sunday.

Previously, workers in Nigeria's 2 million barrel-per-day oil industry, which accounts for 8 percent of U.S. oil imports and is an important source of energy supply in Europe and Asia, said they would cut output if talks broke down, intensifying pressure on President Goodluck Jonathan and his team.

Crude exports account for more than 90 percent of Nigeria's foreign exchange earnings and 80 percent of government revenues.

Unions said they wanted the government to immediately bring the price back down to 65 naira, at which point they would cancel strikes and protests and negotiations could continue.

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 Saturday's talks and to allow protesters to rest. Unions intend to have internal strategy meetings on Sunday.

Several people died in clashes with police last week and 600 were treated for injuries, according to the International Red Cross.

CRISIS PUSHES UP OIL PRICES

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.

All PENGASSAN branches and members at all the production platforms ... (will) execute immediately the systematic shutdown of oil production should the negotiation with the government break down, the main oil union said.

Industry officials doubt unions can stop crude oil exports completely because production is largely automated and Nigeria has crude stored in reserves, but any outage could still have a significant dampening impact on the economy.

Even with oil output unaffected, the strikes are costing Nigeria around $600 million a day, Central Bank Governor Lamido Sanusi told Reuters.

The strikes have prevented tankers from delivering supplies to Nigeria, which, despite its oil riches, imports most of its refined petroleum products.

Many economists have called the subsidies corrupt and wasteful, with billions of dollars of state funds going into the hands of a cartel of fuel importers while giving little benefit to millions of poor Nigerians.

But the Nigerian public, who have witnessed decades of political corruption and worsening public services, view cheaper fuel as their most tangible welfare benefit.

The strikes began with gripes over subsidies but in some areas have become protests at long-term government failures.

Nigeria sells more than $200 million in crude oil a day and holds the world's seventh largest gas reserves. But infrastructure only provides enough power to support a medium-sized European city, meaning most of the country's 160 million people live without electricity.

The confrontation is a serious setback for Jonathan, already under fire for failing to quell an increasingly violent Islamist insurgency in the north.

(Additional reporting by Joe Brock in Abuja, James Jukwey, Chijioke Ohuocha and Tim Cocks in Lagos and Mike Oboh in Kano; writing by Joe Brock; editing by Andrew Roche)