By Omar al-Ibadi
Reuters, 19 December 2005
BAGHDAD - Angry Iraqis staged protests across the country on Monday after the government raised fuel prices as much as threefold in a bid to revive the economy.
Hundreds of demonstrators marched through the streets of Najaf, Kerbala, Sulaimaniya and other towns following the decision, which pushed up the price of fuel for cooking and heating as well as petrol.
The government defended the move, saying fuel was still cheap in Iraq and the hike in prices was necessary to bolster the flagging economy.
Premium gasoline rose by 200 percent while diesel jumped by the same amount. Regular gasoline rose by 150 percent and bottled household gas by 100 percent.
That meant a litre of ordinary gasoline rose from 20 Iraqi dinars -- about 1.4 U.S. cents -- to 50 dinars.
Iraq has the world's third-largest known reserves of oil but decades of war, sanctions, under-investment and now widespread violence and sabotage have left it critically short of fuel.
It has to import nearly half of all its gasoline.
With the oil sector still struggling, the government is spending $6 billion a year to import oil products from other countries. It is under pressure from the World Bank to cut subsidies which keep prices down.
"Iraq is still the only country selling products at such low prices, and that is leading to people smuggling products out of Iraq into neighbouring countries," Oil Ministry spokesman Asim Jihad said, justifying the decision.
The government says it hopes to raise $500 million through the price increase.
But for Iraqis, facing a daily dose of violence and high unemployment, the reforms are likely to cut deep, and are galling in a country that sits on an ocean of oil.
"The whole world is taking Iraq's petrol for nothing while the government is raising the prices paid by the poor miserable Iraqi people," Baghdad taxi driver Saad Alwan Hussain said as he leaned out of the window of his car in central Baghdad.
Hikmat Ibrahim Abbosh, a 39-year-old print worker, said: "We woke up this morning and heard fuel prices had increased. The government wants us to be like neighbouring countries, so why don't they provide us with the things they have so we can live the way they do?"
The cabinet agreed to the price rises in September and had intended to bring them in at the end of the year, but brought them forward to Monday -- just four days after an election.
"If the government faces a deficit, it should think of other ways to remedy it and shouldn't place another burden on our shoulders," said Hassan Jarrallah, a 40-year-old taxi driver.
"I don't know how they could do this."
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Citation: Omar al-Ibadi. "Iraqis protest as goverment hikes fuel prices," Reuters, 19 December 2005.
Original URL: http://www.alertnet.org/thenews/newsdesk/LON958602.htm
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