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UN Office for the Coordination of Humanitarian Affairs 16 January 2006

IRAQ: Shortage of fuel resulting in prohibitive prices

BAGHDAD, 16 Jan 2006 (IRIN) - Ongoing shortages of fuel and constant attacks on oil refineries are causing abrupt increases in official fuel prices as well as price hikes on the black market in the capital, Baghdad.

"We have been suffering from a huge loss of money due to the attacks on our oil refineries that have been costing the ministry around US $22 million dollars per day," Salam Jihad, spokesperson for the oil ministry, said.

According to Jihad, fuel prices have to be increased to help cover the ensuing costs. He said there could be as much as a 100 percent increase in current prices until the end of January.

The decision has resulted in an outcry from local residents and petrol station owners. During Saddam Hussein’s regime a litre of petrol cost less than US $0.05. Today it is selling for US $0.20 per litre.

"If the price of oil rises, Iraqis will be paying for the incompetence of the government in maintaining security and in the meantime millions of Iraqis will not be able to afford the proposed price," said Kamal Yassin, a petrol station owner in the capital, Baghdad.

For now, long queues can be seen daily at petrol stations due to the closure of one of the largest refineries in the country in the northern town of Baiji.

"I am waiting for more than seven hours in this queue and until now I haven't reached the station. It is a shame for the government in a country of petrol and richness," said Ala'a Ibrahim, a taxi-driver waiting in a petrol station queue.

The refinery in Baiji has been shut since the end of December 2005, with no proposed timetable for reopening. The closure was due to death threats to tanker drivers and refinery workers.

"It was an inevitable decision and there is excess work [going on] in the other refineries in the country to cover this deficit,” said Jihad. But if the closure continued “soon some of them will get suffocated by the accumulated work and stop too," he warned.

The shortage of fuel has also hiked up prices on the black market. A litre of poor quality petrol is now being sold informally for as much as US $1.

Many drivers are complaining of the use of water and dyes to increase the volume and make buyers believe that fuel being sold is of a higher quality.

[ENDS]

This material comes to you via IRIN, a UN humanitarian information unit, but May not necessarily reflect the views of the United Nations or its agencies. If you re-print, copy, archive or re-post this item, please retain this credit and disclaimer. Quotations or extracts should include attribution to the original sources. All materials copyright © UN Office for the Coordination of Humanitarian Affairs 2006