Ministry of Oil Dr. Husayn Al-Shahrastani, stated last August that the Fuel crisis was over for the Iraqi people. The Iraqi government had signed oil agreements with the neighboring gulf countries to bring in more Kerosene and Fuel products. The signed agreements are not going as planned and the Iraqi people are back with a fuel crisis the Ministry of Oil maybe possibly spoke to soon or really had not solved the Fuel crisis that has been a problem for quite sometime in Iraq.
The recent oil contracts with Jordan states that Iraq would be selling the oil at $10 a barrel of Oil, very cheap compared to the actual world price hovering at $60 a barrel. Iraq is having problems with fuel distribution to the local gas stations, they can not get it fast enough. The major problem with the local gas station is them selling the fuel on the black market for a quick profit.
The Iraqi government is still subsidizing the fuel. The Iraqi government is buying the fuel for about .35 cents and selling it to the local gas station at .02 cents. When the local gas station owner is buying the fuel at .02 cents and quickly selling all is fuel to the Oil Mafia at .10 cents making five times his money, a one time transaction so the owner can go home and spend more time with his family. Leaving the Iraqi consumer with a closed up gas station and forcing the Iraqi consumer to go to a fuel truck on the side of the road and buying the fuel at 50-100 times the price then the local gas station.
The recent energy and oil contract with Iran is having problems with the transporting of the fuel trucks into Iraq from Iran. The issue is with security and that the drivers are worried for their safety. The Iranian company said they would have the security situation worked out shortly.
The IMF will be having a review with the Iraqi government concerning the SBA agreement this month. This is a scheduled review that is part of the agreement with Iraq government. The IMF, I am sure will be disappointed with the Iraqi government for not raising the fuel and electricity prices as agreed last Dec 2005 when the agreement was signed.
It is possible that the Iraqi government for not keeping there obligation with the IMF SBA agreement that no quarterly payment is made to Iraq. This stop payment will be left up to the IMF.