Iraqi's the only ones getting Cheap Gas!

Published - Jun 05 2004 01:06AM CDT || AP

BAGHDAD, Iraq(AP) One of the prewar forecasts was that by invading Iraq, the world would profit from stable exports of Iraq's oil. And that would translate into cheap gas for American drivers. Now, with U.S. gasoline averaging $2.05 per gallon about 50 cents more than the pre-invasion price that logic has been flipped on its head.

Instead, Iraqis seem to be the only people getting cheap gas as a result of the invasion. They pay just five cents for a gallon thanks to hundreds of millions of dollars in U.S. taxpayer subsidies.

Since Iraq has little capacity to refine its own gasoline, the U.S. government pays about $1.50 a gallon to purchase fuel in neighboring countries and deliver it to Iraqi filling stations. A three-month supply costs American taxpayers more than $500 million, not including the cost of military escorts.

The arrangement keeps a fleet of 4,200 tank trucks constantly on the move, ferrying fuel to Iraq.

Baghdad taxi driver Osama Hashim says he owes his livelihood to the U.S. taxpayer.

"We thank the Americans. They risked their lives to liberate us and now they are improving our lives," said Hashim, 26, topping up the tank on his beat-up 1983 Volkswagen.

Filling a 22-gallon tank in Baghdad with low-grade fuel costs just $1.10, plus a 50-cent tip for the attendant. A tankful of high-test costs $2.75.

In Britain, by contrast, gasoline prices hit $5.79 per gallon last week $127 for a tankful.

Iraq's fuel subsidies, which are intended to mollify drivers used to low-priced fuel under Saddam Hussein, have coupled with the opening of the borders to create an anarchic car culture in Baghdad.

Cheap used cars shipped from Europe and Asia are flooding into Iraq. A 10-year-old BMW in good condition costs just $5,000. Since gas is so cheap, anyone with a car can become a taxi driver. Drivers jam the streets, offering rides for as little as 250 dinars about 17 cents.

Iraq has no sales tax, no registration, no license plates and no auto insurance. Some would argue there are no rules of the road. Cars barrel the wrong way on the highway. They swoop into surprise U-turns. They ignore traffic signals.

Analysts say the U.S. gas subsidies can't last forever.

"The U.S. taxpayer has a right to be indignant, and Iraqis have to be warned about the long-run damages of this," said Anthony Cordesman, an Iraq analyst with the Washington-based Center for Strategic and International Studies. "The minute the aid goes out, the party is over. And there's going to be a hell of a hangover."

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