Gasoline Shortages Frustrate Iraqis

Margaret Besheer
Voice of America
Irbil, Iraq
July 6, 2006

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It is an irony of Iraqi life, that the country with the world's second-largest proven oil reserves must import petroleum products, and has a thriving black market for gasoline. The high cost of gas is driving up prices on everything from produce to appliances, and Iraqis are frustrated.

Under the blazing mid-day sun, taxis idle by the side of the road in the mostly Kurdish city of Irbil. They are waiting for their allotment of gasoline.

Adam says he has been waiting for an hour-and-a-half to fill his tank. At the Chicago Auto Show this month, the head of General Motors' North American operations, Gary Cowger, criticized proposals in Washington to increase fuel economy requirements.

	VOA Photo by Margaret Besheer Taxis receive 40 liters of gas every five days 9KB
	VOA Photo by Margaret Besheer Motorists often wait hours for gasoline 9KB
	VOA Photo by Margaret Besheer Iraq gas station 7KB
	VOA Photo by Margaret Besheer Trucks wait days at the Iraq-Turkey border 8KB

"Forty liters is only enough for one day, and when I run out, I have to buy gasoline on the black market," he said. He added that he pays about $15 for 20 liters on the black market; a hefty sum for a man who earns only about $200 per month.

But as a taxi driver, Adam is doing better than many other Iraqis. Taxis are allowed 40 liters every five days, but private cars are only allowed to fill up every seven days. Gas station prices are set by the government, and taxi drivers receive a discount of a few cents per liter.

Saleh Agha Miran owns the gas station where the taxis are waiting to fill up. The amount of gasoline he gets is controlled by the government, and, when he runs out, he has to close his station until the next delivery.

"If you want to know the truth, the whole city depends on the black market," he said.

Saleh noted that if smugglers did not supply the city, life would stop.

Iraqis need the fuel, not only for their cars, but also for cooking and to power generators. With government electricity in short supply across most of the country, generators are essential, especially in summer heat, which can rise above 50 degrees centigrade.

At another gas station across town, this one for private cars, Ismail waits.

"This is not a life; we do not have fuel, we do not have electricity," he complained. He said that black market prices are high and gas stations are sold out.

A new report from the Iraqi government says refinery output has declined between 40 percent and 60 percent since the U.S.-led invasion in 2003. Refineries are often the target of sabotage, and are in need of extensive rehabilitation. Spare parts are also in short supply, and there are technical problems to resolve.

What Iraq does produce is sold on the open market, leaving Iraqis to rely a great deal on imported petroleum products. Many of those products come from neighboring Turkey.

At the Ibrahim Khalil border crossing between northern Iraq and Turkey, the lines of trucks stretch for kilometers on both sides of the border.

A truck driver told VOA that he has been waiting on the Iraqi side of the border for eight days to take his empty fuel tanker back to Turkey. He says he expects his roundtrip will take a month in total. Many drivers complain that they make no money by the time they pay their travel expenses, and the customs duties on their cargo.

Many Iraqis blame Turkey for the lines at the border, saying their neighbor intentionally closes the crossing to cause them headaches. Whether purposeful or not, such delays only further aggravate the shortage of gasoline.

Back in Irbil, Sadiq sits in the trailer that serves as his office, counting wads of cash - the proceeds from his illicit gasoline business.

The black market functions very openly, with smugglers together on a big lot filled with oil tanks and makeshift offices. On city sidewalks, young men and boys, sell 20-liter jugs of black market gasoline to passing motorists.

Sadiq, the black marketer, says the work is dangerous but lucrative.

"If the smugglers did not bring gasoline from Syria or Iran, the price would be very high, and no one would be able to buy it," he said. He added that there are not enough refineries to meet demand.

Iraq's central government is working to address the shortages, but until then Sadiq and his fellow smugglers are likely to continue profiting.