Institute for War and Peace Reporting | Giving Voice, Driving Change

Oil Products to be Rationed

Government is forced to address the paradox of fuel shortages in an oil-rich country.
By Duraed Salman

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.

The amounts available to customers will vary according to the size of their family. A family consisting of up to five members, for example, will get three canisters of cooking gas every month. A family of between six and 12 members will get four canisters.

“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 hold of.

At current prices, the 150 litres of kerosene needed to heat a family home would cost around 300,000 dinars, over 200 US dollars 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 of petrol consumed here every day is imported.

Fuel smuggling is rampant. The average price in Iraq of a litre of fuel – which is subsidised by the government – is around two US cents. Across the border in Turkey, a similar amount fetches over a dollar.

Many Iraqis are forced to buy fuel on the black market in order to avoid long queues at petrol stations.

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 staff.

Basil Aziz, who works at a filling station, said customers are now willing to pay 5,000 dinars, or 3.4 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.

Duraed Salman is an IWPR trainee in Baghdad.

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