Iraq May Cut Fuel and Electricity Subsidies

Sinan Salaheddin, Associated Press
Publication Date: 
Tue, 2005-05-31 03:00

BAGHDAD, 31 May 2005 — The Iraqi government may decrease subsidies for fuel and electricity, despite a severe shortage of both in the country, the electricity minister said Sunday as he warned Iraqis to prepare for more blackouts this summer.

Mihsen Shalash said the government was unable to generate power for everyone, and blamed the shortages on acts of sabotage and lack of fuel for power plants. “We do have real problem and an electricity crisis and we can’t supply power 100 percent this summer” Shalash said. “We can’t perform miracles.”

The government has continued Saddam Hussein’s practice of subsidizing gasoline and electricity keeping the price at the pump for a gallon of gasoline at a paltry 6 cents.

Before the US-led invasion, residents of Baghdad had about 20 hours of electricity a day. Today, they get about 10, usually broken into two-hour chunks. There are also frequent fuel and drinking water shortages, and only 37 percent of the population has a working sewage system.

Shalash said the Iraqi government had agreed with neighboring Turkey to increase the electricity coming into Iraq and the amount of water flowing down the Euphrates River for a power plant at Haditha, northwest of Baghdad. Iraqi government spokesman Laith Kuba also acknowledged that Prime Minister Ibrahim Al-Jaafari would lift part of the current government’s subsidy on fuel and electricity. Kuba didn’t say when or by how much the government fuel prices would increase and neither he nor Shalash provided any further details on the plans, including how much they expected budget revenues to increase. “The current prices of gasoline and kerosene are close to free,” Kuba told reporters. He said the government would continue to subsidize fuel sold to families and people with limited incomes, without elaborating. Similar subsidies will continue on electricity bills, he added.

Main category: 
Old Categories: