Oil Products to be Rationed in Oil-Rich Iraq

By Duraed Salman

BAGHDAD, Iraq, September 2, 2005 (ENS) - The Iraqi Oil Ministry is set to begin issuing rationing cards from September, as part of an effort to ease a shortage of oil products such as kerosene and cooking gas.

While Iraq is believed to have the world’s second largest oil reserves, the lack of refining capacity, due in part to insurgent attacks, means it is forced to import petroleum products rather than produce them out of its own crude oil.

The rationing scheme is being introduced in time for winter, when prices for goods like kerosene would otherwise be likely to soar.

Initially, it is fuels for household use that will be rationed - kerosene for heaters and liquefied petroleum gas, LPG, for cooking - but similar measures are likely to be imposed in future for the petrol and diesel used in vehicles.

Ibrahim Bahr al-Ulum, who works for the Oil Ministry, explained that the petroleum products included in the scheme will be distributed by the same agents who already supply rationed food items.

Cooking gas is becoming expensive and hard to obtain. (Photo by Antonia Paradela courtesy WFP)

“We will ensure that kerosene and cooking gas will be provided to citizens this coming winter,” said al-Ulum.

Waad Qahtan, a grocery story owner and head of a household of seven, said kerosene is both expensive and hard to get.

At current prices, the 150 liters (39 gallons) of kerosene needed to heat a family home would cost around 300,000 dinars, over US$200 for each month of the coming winter. That is more than many monthly salaries.

“The price may double in the winter,” added Qahtan, “but families will have no other choice but to buy it or else sleep in freezing conditions.”

Iraqis have similar problems getting hold of vehicle fuel. Because of the lack of refining facilities, over a half of the more than 23 million litres (six million gallons) of petrol consumed here every day is imported.

Fuel smuggling is rampant. The average price in Iraq of a liter of fuel – which is subsidized by the government – is around US$.02. Across the border in Turkey, a similar amount fetches over a dollar.

Long lineups to buy fuel are a fact of life in Baghdad today. (Photo courtesy UN Joint Logistics Centre)

Qaiser Khalid, a taxi driver, blames corruption for the crisis. Many drivers pay bribes to fuel station staff to jump the queue or to fill up extra tanks concealed in their vehicles.

“Even dead bodies aren’t returned to families without a bribe changing hands,” said Khalid, “so how will it be for fuel and other oil products?”

In addition to rationing fuel, the government plans to soon ban the police from filling up at public petrol stations. Some Iraqis complain that police officers use their position to jump queues.

Saad Sultan, a civil servant, said the government’s inability to solve the shortage of fuel and other oil products has made him pessimistic about Iraq’s future.

“God is laughing at us,” he said as he waited in a long line at a fuel station in the al-Waziriyah area of Baghdad. “The current government has been unable to control the oil products crisis, and that is the simplest of things. So how can it keep its other promises?”

In the meantime, one group of people who have benefited from the shortages is petrol station owners and their staffs.

Basil Aziz, who works at a filling station, said customers are now willing to pay 5,000 dinars, or US$3.40 dollars, to fill the tank of an average vehicle. Before the current crisis, the cost was 1,500 to 2,500 dinars.

“I’ve earned a good sum of money and I’ve been able to buy a modern car and a house as a result,” said Aziz.

{Published in cooperation with the Institute for War and Peace Reporting.}