BAGHDAD, 3 January 2006 — Iraq’s Oil Minister Ibrahim Bahr Al-Uloum said yesterday he had submitted his resignation as the country’s oil exports slipped to their lowest level since the middle of 2003.
Uloum said he had resigned in opposition to fuel prices imposed by the government on Dec. 19. He was placed on leave against his will shortly after the price rises came in and has since been replaced as head of the ministry by Iraqi Deputy Prime Minister Ahmad Chalabi. Chalabi is already head of the Oil Council, a Cabinet-level board, and is influential on Iraq’s economic and commodities policy. Commenting on Uloum’s departure, Shamkhi Faraj, director general of Economics and Oil Marketing, said the resignation would not have much impact because the government is about to change anyway following the election of Dec. 15. “The government is in an interim period. He couldn’t have taken any important decisions, even if he hadn’t resigned. He would have had to wait for the new minister to take office.” “The impact will be limited.”
The change at the top of the Oil Ministry comes after a month of turmoil in the oil sector. The government shut the country’s main refinery, at Baiji in the north, following security threats, and bad weather brought exports from Iraq’s southern ports to a halt.
Faraj said these and other factors had forced exports down to their lowest level since they began again in mid-2003 following the war to oust Saddam Hussein. “Exports hit a low level in December at 1.1 million bpd (barrels per day). This is the lowest since exporting began again after the war,” he told Reuters.
Iraq increased state-controlled prices of gasoline and diesel by up to 200 percent two weeks ago, angering Iraqis who are used to paying heavily subsidized prices.
Uloum opposed the plan and said the price hikes should have been introduced gradually to satisfy both the demands of the International Monetary Fund for an end to subsidies and the demands of ordinary Iraqis for cheap fuel.
The government says the price hike was necessary to stop smuggling of cheap Iraqi oil products to other countries and also to discourage the black market inside Iraq.
Uloum said that Iraq had proposed a series of price increases to the IMF, but the IMF had asked for more. “The IMF has asked the government to introduce different prices in order to sign the deal on Dec. 23,” Uloum said. “This increase does not serve both the interests of the government and the Iraqi people,” he said.
Falling oil exports and fuel shortages, especially gasoline, have angered Iraqis who already queue up at gasoline stations in Baghdad for hours to get their needs.
Iraq signed a crucial loan accord with the International Monetary Fund on Dec 23. The $685 million IMF standby credit arrangement was the fund’s first ever with Iraq and was designed to support its economic program over the next 15 months.