Iraq pays $637 million to cover fuel imports from Turkey

 

By Sameer Naser

 

Azzaman, March 4, 2006

 

The Finance Ministry has transferred to Ankara overdue payments totaling $637 million to cover fuel imports from Turkey.

 

The Oil Ministry should have paid the money in 2005 but lack of allocations has reportedly prevented it from doing so.

 

The delay in payment had prompted Turkish fuel exporters to turn off supplies, exacerbating fuel shortages across the country.

 

Since the 2003 U.S.-led invasion, Iraq has turned into a net fuel importer with Turkey meeting up to one third of domestic needs.

 

While fuel imports increase and domestic refining capacity shrinks, the country’s already strapped coffers find it hard to meet the spiraling fuel import bill which last year is said to have exceeded $1 billion.

 

Iraq oil exports are still below the pre-war level and refining capacity is said to have plunged mainly due to insurgent attacks and lack of maintenance.

 

Currently gasoline imports for example run most of the country’s vehicles and generators with domestic refineries only capable of processing limited amounts of crude into gasoline.

 

Despite its massive oil riches, Iraq has been importing fuel from all of its six neighboring nations but delay in payments has already angered the Saudis who are said to have shut the spigot.

 

Kuwait is also reported to have stopped ferrying fuel to the country which now relies mainly on Iran, Turkey and Jordan to meet domestic needs.