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Iraq: Oil Chief Says Gasoline Shortages Should Ease This Month

Baghdad has never seen such long queues at petrol stations as they have following the fall of Saddam Hussein's government. The queues for petrol sometimes extend up to 3 kilometers -- this in one of the world's most oil-rich countries. The head of the Iraqi Oil Ministry says people are experiencing shortages caused by the war and that supplies should increase over the next three weeks.

Baghdad, 2 June 2003 (RFE/RL) -- Iraqis are waiting long hours in temperatures of 40 degrees Celsius to get their cars filled with petrol. U.S. troops with tanks and other heavy military equipment guard the petrol stations. The stations are surrounded with barbed wire and only diplomats are allowed to buy gasoline without queuing the whole day.

People are cursing everyone for the problem, but U.S. troops are the targets of most of the abuse. The citizens of Baghdad say there was enough cheap gasoline under the previous regime but that it disappeared when deposed Iraqi President Saddam Hussein did.

It is not a problem to buy gasoline on the streets, but the price is three times higher than at petrol stations -- $0.30 for a liter, compared with $0.10 at the stations. Some Baghdad residents are making money from the gasoline shortage. They queue all day to fill a tank and sell the petrol for a higher price around the corner, then queue for another tank. Residents are only allowed to buy one tank of gasoline at a time.

Thames Abbas Ghadban, the highest-ranking official in Iraq's Oil Ministry, predicts that the crisis will soon ease: "We need a few weeks to produce just enough for the consumption. Now, the consumption is much more than the production in Iraq, as well as we don't have any stocks as a flexibility."

Iraq's Oil Ministry is a huge building in Baghdad guarded by U.S. troops who thoroughly search everyone who enters the building. It is the only ministry that was not looted after the fall of Baghdad. Visitors can read several appeals -- written in rough English -- tacked on the wall near the entrance: "We demand honest administration," "We refuse to work with persons who served the previous regime," and "There is no justice in the new salary system."

Ghadban predicts there will be enough gasoline for normal consumption by mid-June and that some reserves will have accumulated by the end of the month. Ghadban says the main reason for the petrol shortages is the war. When it ended, all three of Iraq's main oil refineries -- in Basra, Baghdad and Beji, some 40 kilometers from Tikrit -- were not functioning, and there were no reserves of gasoline remaining in the country.

He says the production capacity of the refineries has increased and that Iraq has also started importing gasoline from neighboring Gulf countries.

Ghadban also says Iraq plans to renew its oil exports in the near future: "We will be exporting very soon, perhaps in two weeks time. It will be small, but it will increase. What I could say, it would start at a modest level but the objective is that we have to go back to our previous production capacity. Before the war, it was 3 million barrels per day."

He says that by the middle of September, Iraq plans to export 1.5 million barrels of oil per day and to reach 3 million barrels per day by the end of the year.

"In 1997, Iraq signed an agreement with OPEC that there would be no production limit for Iraq," Ghadban says, "and this agreement is still in force."

He says the Oil Ministry is making contacts with foreign companies to participate in the country's oil sector but that nothing is agreed yet. Russia's Lukoil had one of the biggest oil contracts with Iraq but it was canceled last year by the former Iraqi government. The Russian company protested and threatened to take the case to international court.

Ghadban could not say if the Lukoil agreement will now be observed: "Those contracts, and we have potential for more, will be studied accordingly in due time."

Ghadban declined to comment about any time frame and what other foreign companies are interested in investing in Iraq. He says the ministry has asked foreign investors to postpone their arrival in Baghdad because Baghdad is -- in his words -- "totally absorbed with solving the fuel crisis and with restoring the oil fields."

Ghadban says the Oil Ministry is working closely with U.S. officials in Iraq but that he does not feel any U.S. pressure or control. The policy of the ministry, he says, is independent, but he acknowledges that it is coordinating the security of oil fields and facilities with the Americans.