If you weren't already pissed about gas prices...
 

Iraq Enjoys Some of World's Cheapest Gas

LONDON (Aug. 17) - Motorists struggling with high gas prices in the United States and Europe may be surprised to learn that consumers in Iraq pay as little as 5 cents a gallon, according to the International Monetary Fund's first assessment of the Iraqi economy in 25 years.

Thanks to generous government subsidies on petroleum products -- which the IMF criticized as a threat to the country's fragile economy -- Iraq has some of the cheapest gas in the world.

By contrast, Americans pay about $2.55 a gallon and Britons pay $6.24. Iraqis also pay much less for a gallon of regular gasoline than in nearby countries such as Iran (38 cents), Jordan ($1.89) and Syria ($1.74).

Even the many Iraqis who pay higher, black-market prices at the pump often make money by smuggling gasoline into neighboring countries such as Turkey, according to the International Monetary Fund's 62-page report released Monday.

Iraq's government hasn't been able to fulfill its promise to the IMF to slash the massive subsidies, given how much the country already is suffering from escalating violence by insurgents, high unemployment and inflation, and poor electricity, water and sewage services.

Last month, the Yemeni government agreed to reverse its earlier decision to lift subsidies on oil products after a wave of riots and strikes swept Yemen's major cities.

In 2004, gasoline subsidies alone cost the Iraqi government $3 billion, the IMF said.

Therefore, the IMF said it was cutting its forecast for gross domestic product growth this year from 17 percent to 4 percent. In 2004, the Iraqi GDP was $25.5 billion. This year it is projected to reach $29.3 billion.

The IMF said oil production was likely to reach only 2 million barrels a day over the year, down from its earlier estimate of 2.4 million barrels "because of the continuing sabotage of oil installations and the resulting halting of oil exports from the north."

Before U.S.-led forces defeated Saddam Hussein, whose government also heavily subsidized gas prices for consumers, average annual oil production in Iraq was 2.5 million barrels per day.

The IMF said the government was likely to run short of money in the second half of this year because of lower oil exports and a shortfall in revenue largely caused by the subsidies.

Iraq's proven oil reserves, estimated at about 115 billion barrels, are the world's third largest. The potential development of the oil sector is considerable, given that a large portion of the country remains unexplored.

That's why oil analysts closely watch Iraq's oil production and export figures to see if they will affect the world's skyrocketing oil prices, now hovering at about $66 a barrel.

"Because of the tight situation of the oil market, any increase in Iraqi production will have a positive affect on the supply side," said Muhammad-Ali Zainy, a senior energy economist at the London-based Centre for Global Energy Studies.

Iraq's economy has benefited from today's oil prices. But widespread attacks by insurgents limit its oil exports. Also, the government doesn't have the money it needs to rehabilitate and upgrade an oil industry infrastructure that has fallen apart during two decades of wars, misuse by Saddam Hussein's government and international trade sanctions.

Zainy said few changes are expected in Iraq's current oil exports of about 1.6 million barrels a day, mostly through its southern ports, which have suffered far fewer insurgent attacks than the main pipeline to Turkey in the north.

"The problem is that the Iraqi economy is in a shambles and non-oil income is trivial, so the government is almost completely dependent on oil income and whatever the international community can contribute," Zainy said.

Issam al-Chalabi, who served as Iraq's oil minister in the late 1980s, agreed.

"It's doubtful the government will be able to do anything of significance regarding its oil market this year," al-Chalabi said in a telephone interview from Jordan, where he now works as an oil consultant.

He said the insurgent attacks mean none of the world's major oil companies are willing to invest in the country.

Al-Chalabi said these companies also don't want to sign significant contracts in a country that is currently drafting a new constitution that could affect the oil industry and that plans to elect a new national government later this year.

"BP and Shell are not planning to go into Iraq any time soon. Until you get a new elected government and much better security, forget it," al-Chalabi said.

standard of living is not the same in the US as Iraq buddy, maybe $0.05 USD can feed a family of four for a week there?

And im sure they don't have to import any of it.-- Your rolling on 20"s and complaning about this?>

i'm more worried about idiots in G35's ruining my insurance rates by crashing and dying and such.

Wait, why are we complaining about this oil stuff? Didn't we invade them so we can have a stronger economy[more oil] and sand?

Next up: china and those other countries where those people can't see very well. Rice price gauging is just outrageous! Those people almost eat rice for free over there, while we have to pay nearly 20 cents per pound!


You guys should sign up for gas credit cards (or some of you should tell your parents, anyway), and at least get 5% back. Or learn the fine art of siphoning gas from premium brand cars. A hose and some suction can save you about $40. That's a lot of suction.

you're a genius, got a phd?

i was once a featured speaker at the special olympics.

m-o-o-n, that spells phd.

That's not the point...

Yes, I am, and rightfully so

its their oil so to speak...shouldnt it logically be cheaper for them....

Of course its cheaper there it doesn't have to go anywhere lol. Shipping/Import/Export all that costs money. Anyways yeah its expensive here but look how we live! Like player said. Anyways we're paying half of what England pays so that makes me smile when paying out the *** for gas.

What is? So cost of living is not a factor in being a whiney American?

whiners, go sell your car and get a civic.

ROFL 10X.

Nice partial quote from The Stand.

errrr.. fyi.. america exports more rice to china and many other countries..

why dont you all just count how much of a difference this rise in gas is costing you, an extra $10/tank? if filled up once a week, then aboue extra $40/mo, im hoping since you guys have a $40k car, then an extra $40/mo should be that much of a problem (especially those on bigger wheels and SC/TT)