Thursday, August 18, 2005
A new report indicates that while Iraq‘s economy remains in a shambles and the prospect of future growth is still dim, Iraqi citizens do enjoy some of the least expensive gas prices in the world.
The International Monetary Fund says Iraqi drivers currently pay an average of 5 U.S. cents a gallon (1.32¢/L) for gasoline. This contrasts to averages of $2.55 (67.4¢/L) in the United States and $6.24 ($1.65/L) in Great Britain. Even neighboring Iran pays more at the pump than Iraq; 38 cents a gallon (10.0¢/L).
The low cost is due in large part to generous pre-war government subsidies on petroleum products that remain in place today.
In its report, the IMF warned the subsidies are a threat to economic growth in the country. The country still suffers near daily insurgent attacks, high unemployement, inflation, and frequent electrical, water, and sewage service disruptions.
Meanwhile, Iraqi oil output continues to recover. Prior to Operation Iraqi Freedom, Iraq’s daily output of crude was 2.5 million barrels a day. This week, oil production is 1.6 million barrels per day. Iraq’s oil reserves are estimated at nearly 115 billion barrels, the third largest in the world.