Iraq still reeling under fuel shortage
Associated Press
Wednesday, July 02, 2008, (Baghdad)
Residents in Baghdad endured a second day of petrol shortages on Wednesday, a stark reminder that Iraq, a country with one of the world's largest oil reserves, faces major challenges delivering fuel to its people.
On Tuesday, Oil Ministry spokesman Assem Jihad blamed the shortage on the sabotage of a pipeline bringing crude oil from the southern fields to a refinery in Baghdad.
The fragile nature of the country's oil distribution system means that periodic shortages appear from time to time, but this week's crunch seems worse than most.
Although unrelated, the long lines followed Iraq's announcement on Monday that it was opening six major oil fields and two natural gas fields to development by foreign firms, which could lead to the biggest outside stake in Iraq's oil industry since it was nationalised more than 30 years ago.
The government hopes these contracts will boost oil production by 60 per cent from levels that are already the highest since the US-led invasion in 2003.
Some fear a dominant role for Western oil companies could feed perceptions that US-led forces toppled Saddam Hussein to grab the country's natural resources.
However increased production should provide additional resources to rebuild Iraq's infrastructure and deliver services to the people.
Iraq has been plagued by periodic fuel shortages since the 2003 US-led invasion and occupation.
The government continues to have problems providing regular power, and many rely on gas-run home generators for electricity.
The official price for a litre of gasoline in Iraq is the equivalent of about 38 cents, or about 1.44 dollars a gallon; but the black market price, which has risen significantly in recent days, can be almost three times that amount.
One driver said he had been queuing since 10 pm on Tuesday night for fuel.
"The owner of the petrol station said there was no petrol, no oil tanker had come to the station yet," Sami Abass added.
The current crisis comes amid higher demand for fuel to power generators and air-conditioning units in homes and offices.
The demand was expected to increase further in sweltering conditions when summer temperatures hover around 42 degrees Celsius (108 degrees Fahrenheit).