Business | Oil & Gas

Iraq reels from acute fuel shortage

At gas stations around Baghdad, the line of cars waiting to fill their tanks with increasingly rare petrol now reaches 60 to 80 vehicles.

  • By Basil Addas, Correspondent
  • Published: 00:00 August 18, 2006
  • Gulf News

Baghdad: At gas stations around Baghdad, the line of cars waiting to fill their tanks with increasingly rare petrol now reaches 60 to 80 vehicles.

Some prefer to spend the night in their vehicles on streets to maintain their turn in the long line.

The nationwide fuel shortage is so severe that 20 litres now cost about $20 (Dh73.56).

The official price of fuel is 250 Iraqi dinars per litre, or 5,000 dinars ($3.50) for 20 litres, and 350 dinars for a litre of special fuel.

"The increasing fuel shortage has led to a 40-50 per cent commodities price increase because transportation costs have increased. This negative development has increased citizens' transport to 80 per cent," Najm Abdul Saheb, chairman of the Consumer Protection Authority in Baghdad, told Gulf News.

Fuel distribution and marketing stations are centres of corruption in Iraq.

Tens of illegitimate dealers stand near stations, making deals with gas station employees to sell fuel on the black market, sharing profits.

"Security forces are unable to control the work in gas stations because the number of accomplices smuggling fuel from the stations to the black market is increasing, and I can honestly say there is a fuel smuggling mafia," said Ahmad Al Askari, a security officer at a gas station in Al Hurriya square in Baghdad. "Corruption has extended to security officers too, who assist these smugglers … selling fuel for double its price."

Political sources have warned that Iraq might be on the brink of a fuel revolution, similar to the outburst that took place in the southern Samawa governorate.

This made the Ministry of Oil put together a committee to try to find solutions to curb fuel smuggling to the black market.

Prime Minister Nouri Al Maliki and Minister of Oil Hussain Al Shehrestani are trying to find solutions by co-operating with Iran and Turkey, but solutions keep bumping into the security problem, especially on how to transport imported fuel over unsecured roads, amid increasing violence.

The problem is being further aggravated because residents need to obtain fuel for power generators amid electricity shortages in the capital and all around Iraq.

The question that is often heard on the street repeatedly is, "Will this fuel crisis lead to the downfall of Al Maliki's government, or will it only topple Hussain Al Shehrestani who promised to solve this problem since his first day in office?"

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