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Iraqi Oil Minister Replaced as Country Faces Fuel Shortages

Political problems, weather and the threat of insurgent attacks have caused gasoline lines in Iraq to grow exponentially over the past few days. Two of Iraq's major oil facilities have had to shut down, and the oil minister has been temporarily replaced. The crisis has its roots in a government decision to roll back oil subsidies, to try to appease lenders. Gas prices have risen 300 to 600 percent.

Oil Minister Ibrahim Bahr al-Ulum protested the increase in gas prices. Mr. al-Ulum told VOA he did not disagree with the increase, but the way it was implemented. He said the government should have raised prices in stages, and provided assistance for poor Iraqis, about a quarter of Iraq's population earns less than $1 per day.

Now, the Iraqi government has suspended Mr. al-Ulum for 30 days, and put Iraq's deputy prime minister, Ahmed Chalabi, in charge of the oil ministry.

Two weeks ago, the Iraqi government abolished a large portion of the country's subsidies on gasoline, diesel and kerosene. In addition to fueling vehicles, Iraqis use oil products to heat their homes, and to fuel generators for the 18 hours that the lights are off in Baghdad.

The price increases have led to protests by angry Iraqis.

Taxi driver Ahmed Abdul Kadr says he does not know how he will survive.

"I will have to double my prices," said Ahmed Abdul Kadr. "I don't know if that's the right way to solve the problem, because then no one will take a taxi. They will walk."

The Iraqi government has agreed to roll back fuel subsidies in order to comply with International Monetary Fund rules.

The IMF program aims to forgive 80 percent of Iraq's $120 billion debt. But "There are certain conditions that came with this program," said Thomas Delare, the U.S. Embassy economics counselor in Baghdad. He says the subsidies were sucking Iraq's budget dry.

"It simply did not permit Iraq to spend its resources on health, education, infrastructure development or security," he said.

But the price increase came at a bad time. Over the past week, two major oil facilities have been shut down in Iraq. Iraq's only port, Um Qasr, has been closed due to bad weather, halting oil exports. Also, insurgent threats to tankers delivering fuel from Iraq's Baiji oil refinery, the country's largest, have closed that plant.

The uncertain situation has caused Iraqis to wait in hours-long lines to buy fuel for their cars, their stoves and their generators.