June 8, 2004

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  U.S. subsidy keeps gas price low in Iraq
  

  By Jim Krane
  The Associated Press

  
  

  
  

  
  
  
  
  
  

  LAURENT REBOURS / AP A U.S. soldier jokes with an Iraqi while supervising gasoline distribution at a Baghdad station.

  
  

  
  

  BAGHDAD, Iraq — Iraqis pay only about 5 cents a gallon for gasoline — a benefit of hundreds of millions of dollars in subsidies bankrolled by American taxpayers.
  

  Some forecasters predicted that by invading Iraq and ousting Saddam Hussein, America would benefit from increased exports of oil from Iraq, which has the world's second-largest petroleum reserves.
  

  More than a year after the invasion,  the price for gasoline in the United States is averaging $2.05 a gallon — 50 cents more than the pre-invasion price.
  

  Although Iraq is a major petroleum producer, the country has little capacity to refine its own gasoline. So the U.S. government pays about $1.50 a gallon to buy fuel in neighboring countries and deliver it to Iraqi stations. A three-month supply costs American taxpayers more than $500 million, not including the cost of military escorts to fend off attacks by Iraqi insurgents.
  

   

  • 7:56 pm
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