Rising gas prices frustrate Iraqis

Oil minister suspended for his opposition

drivers stuck for hours in line for fuel

December 31, 2005|By NEW YORK TIMES NEWS SERVICE

BAGHDAD, Iraq --A fuel crisis in Iraq deepened yesterday when the oil minister was suspended for objecting to steep government-imposed price increases for gasoline and cooking oil.

Angry drivers waited in quarter-mile lines at gas stations in Baghdad, brought by fears of more price increases and electricity failures, which have forced them to siphon fuel for use in power generators.

There was also concern over problems with refineries, including a shutdown at a major refinery in Baiji, 130 miles north of Baghdad.

The oil minister, Ibrahim Bahr al-Uloum, had been outspoken in his opposition to the decision this month to triple the price of the most common type of gasoline while raising prices for diesel ninefold. He said that while some increases were needed, such large ones would put far too heavy a burden on Iraqis.

But upon returning from vacation outside Iraq this week, al-Uloum learned that Prime Minister Ibrahim al-Jaafari had ordered him to give up his post for the next 30 days, according to an Oil Ministry spokesman.

"When he came back, he was astonished to find that the prime minister issued a letter ordering Dr. Ibrahim to stay 30 more days on holiday because of his disagreement and his threats to resign from office," said the spokesman, Asim Jihad.

Al-Uloum has been replaced by Ahmad Chalabi, the deputy prime minister and one-time White House favorite who served as interim oil minister earlier this year. An aide to Chalabi said it was not clear how long he would stay in the post or whether al-Uloum would return.

The scramble for gasoline in the capital was set off by several factors.

The ministry shut the refinery in Baiji last week after insurgents threatened to kill drivers who trucked gasoline and other products across Iraq. And the oil pipeline that feeds the Dora refinery in Baghdad was damaged recently by insurgents, Jihad said. He said he did not know when the two plants would operate at capacity again.

Drivers who were interviewed yesterday said they were rushing to fill up after hearing rumors of more price increases for gasoline. Jihad denied that any additional increase was imminent.

The drivers also said the availability of electricity had been so spotty - even by Baghdad standards - that they had been forced to hoard gasoline and siphon it from tanks for use in electricity generators.

The long lines began four days ago, said Capt. Akeel Rashid, commander of a security force guarding a large filling station in eastern Baghdad. Normally the wait is 20 minutes; now it is two hours or more, he said.

"The electricity is very bad now," Rashid said. "People come once for their cars and once for their generators."

In the continuing violence in Iraq, insurgents killed five Iraqi civilians yesterday and wounded 23 more when a bomb hidden inside a parked car detonated near a bus station used by Shiite commuters, the Iraqi police said.

Later, gunmen in an Opel sedan opened fire on Iraqis drinking alcohol and relaxing on a street in the Sunni district of Adhamiya in the capital, killing one and wounding five others.

A soldier assigned to the 2nd Marine Division died after being shot Thursday by insurgents in Fallujah, and another soldier was killed in Baghdad yesterday by a roadside bomb, the American military said.

News agencies also reported that Sudan would close its Baghdad embassy in an attempt to save the lives of six employees who were kidnapped by members of al-Qaida in Mesopotamia. The kidnappers have threatened to kill the employees unless the mission is shuttered.

Though Iraq sits atop huge oil reserves, its refineries remain in poor shape, damaged by constant insurgent attacks and dilapidated from years of underinvestment.

The refineries can produce only a portion of the gasoline needed here, forcing Iraq to import more than $5 billion worth every year, a process that supports widespread smuggling. At the same time, Iraqi drivers are used to very inexpensive gasoline - roughly 6 cents a gallon under Saddam Hussein - because of heavy subsidies by the government.

This month the government raised the price of regular domestic gasoline to about 40 cents a gallon, and to about 70 cents for special imported gasoline. (By comparison, regular gasoline sells on the black market - which avoids gas lines - for almost $1 a gallon.)

Diesel fuel and canisters of liquefied cooking gas also had large increases, enraging drivers and homeowners in a country where many families make less than $100 a month.

The increases were part of a deal Iraqi leaders struck with the International Monetary Fund to eventually wipe out the debts that Hussein accumulated. As much as 80 percent of $120 billion in debts could eventually be canceled, according to Western officials in Baghdad.

But for Iraqis that comes at a very steep price. The deal with the IMF calls for Iraq to eventually increase fuel prices to levels in line with the rest of the Middle East, where the average price of gasoline is about 87 cents a gallon. Though that is below the true cost, Iraqis already furious over price increases this month face another doubling of prices in the next year or two.

Killed in Iraq

As of yesterday, 2,178 U.S. service members had died since the beginning of military operations in March 2003.

Identifications:

Army Spc. Aaron M. Forbes, 24, Oak Island, N.C.; killed Wednesday in Baghdad when an explosive detonated near his vehicle; assigned to the 1st Battalion, 67th Armored Regiment, 2nd Brigade Combat Team, 4th Infantry Division, Fort Hood, Texas.

[Associated Press]

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