While pipeline sabotage is limiting the amount of oil exported by Iraq and the amount refined and used locally the United States is paying to import gasoline into Iraq to sell it at subsidized prices.
Under Saddam Hussein, cheap energy thrummed through these pipes with metronymic regularity and became a birthright of all Iraqis. All petroleum products here cost a fraction of their market value. A gallon of gasoline is about 10 cents - cheaper than bottled water.
This expectation of cheap gas has forced the coalition to import gasoline and other products and sell them at big losses to avoid unrest. House Democrats complained earlier this week that Halliburton Inc., which has the major oil-reconstruction contract here, was charging the US $2.65 cents a gallon for gas being sold in Iraq for a fraction of its cost.
I think it was a mistake not to immediately allow gasoline prices float to a market level where demand and supply equalled. Would that anger people enough to stage protests or even to become terrorists? Maybe. But it is a necessary change.
|Share |||By Randall Parker at 2003 November 05 08:25 AM Mideast Iraq|