Oil-rich Iraq squeezed at the pump

It is a scene repeated daily throughout Iraq: hundreds of motorists queuing on the side of the road, waiting patiently for their turn to fill up their cars with gas.

Ihab Hussein, a student at Baghdad University, joined the queue for the Liberation gas station at 8 a.m. It took him four-and-a-half hours inching along a line of cars stretching almost two miles to reach the pumps.

"It makes me very angry and it's getting worse," he says.

For a country floating on the second-largest oil reserves in the world, it is a bitter irony for many Iraqis that the country is facing a fuel crisis that has created shortages of gasoline, diesel, kerosene, and propane.

Officials blame a lack of regular electricity to work the pumps, a huge increase in the number of vehicles, attacks by militants against oil pipelines, a thriving black market, dilapidated oil refineries, and increased demand in the Kurdish area of northern Iraq which was denied fuel during Saddam Hussein's regime.

"An awful lot of the problem stems from black marketeers and the perception in the country that there is a fuel shortage, which has resulted in panic-buying," says an official with the US-run Coalition Provisional Authority (CPA).

The coalition says 1 million gallons of fuel are to be imported from Turkey this week, which the official says will help address the problem.

But the daily fuel-consumption rate in Baghdad alone is estimated at 1.6 million gallons a day. The entire country runs through 4 million gallons a day.

The Ministry of Oil is hoping to purchase 10,000 tons of fuel from Iran and is negotiating similar deals with other countries including Qatar, Saudi Arabia, Kuwait, and Jordan.

"We have a 40-percent shortage in oil production," says Assem Jihad, a spokesman for the Ministry of Oil. "But the main problem is that the gas stations are selling their fuel on the black market so there is not enough for legitimate sales at the pumps."

Black marketeers, clutching rubber siphon pipes and jerrycans of yellow gas, are a common sight on the sides of roads.

Abu Mohammed normally drives a taxi, but he says it is more profitable to sell the gas in his tank on the black market than drive customers around Baghdad.

"It's my first day doing this," he says. "I queued from midnight to 6 a.m. to fill up my car with gas. My tank holds 24 gallons and I have already sold 5 gallons."

Abu Mohammed sells his gas at the black market rate of 750 Iraqi dinars (37.5 cents) a liter, 10 times the legal price.

For many Iraqis, the black market price is prohibitively high and they are forced to join the lengthy lines at gas stations.

"It's very embarrassing and shameful," says Mohammed al-Zubaydy, the director of the state-owned Liberation gas station as he eyes the queue stretching up the road. "We have enough benzene, but the problem is the crowd."

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