If you read this news article by James Glanz and Robert F. Worth of the Press Democrat you will be given a new insight on the operation of the large network of the smugglers and criminals in Iraq stealing and pilfering Iraqi oil. Iraq uses the oil revenue to help fund the reconstruction efforts and billions of dollars are removed from the Iraqi economy due to oil smuggling.
Up to 30% of the imported gasoline is stolen and then resold to the neighboring countries of Iraq at huge profits. If you want to make a lot of money in Iraq just get yourself an empty fuel tanker and you’re in business. You drive your empty tanker into Turkey and pick up a load of gasoline at full retail price and sell the gasoline on the black market at a higher price.
When the fuel truck is empty before you head back to Turkey to pick up another full tank of gasoline, you just pull up to a gas station and load up with the lower price Iraq subsidized gasoline and take the fuel into Turkey and sell it at a higher price. If the Iraq fuel station can only give you a half a tank then you would still gain a profit when you sell in one of the neighboring countries.
According to the article Iraq has spent anywhere from 4-5 Billion in 2005 to import gasoline from Iraq’s neighboring countries. Now you see why the IMF wants Iraq government to stop the subsidies on gasoline to the Iraqi people. I think I would rather spend 5 billion on reconstruction projects or Central bank and banking infrastructure then having it stolen by smugglers. It’s going to be difficult to remove the fuel subsidies all together especially to be inline with the IMF agreement at the end of 2006.
I believe all this ties into not having the cabinet posts of Interior, Defense, and National Security because remember what the New Finance minister Bayon Jabor, said after he was appointed to his new position.
“I shall work with all my passion and my commercial experience to preserve the money of Iraqis,” the former interior minister told reporters when asked for his policy priorities.
“My priority is preserving Iraqi funds, as I preserved Iraqi lives when I was interior minister,” he told Reuters. “I will also fight corruption in the administration of the Finance Ministry as I did at Interior. That will be a priority.”
I hope the Iraqi funds he is speaking about is the common Iraqi that is trying to make a living and provide for his family and not the “oil Mafia.”
When you read the article the oil corruption is very much embedded in Iraqi society. Let’s hope the Iraq government can clean it up and soon. We can start by confirming the absent cabinet posts and work on cleaning house.