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.
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.
… 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 — and Iraqis may be in for an unpleasant shock when they end. In the meantime, however, the American taxpayer continues to foot a huge bill.
“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.”
The U.S. government paid even more last year for Iraqis’ gasoline — between $1.59 and $1.70 per gallon — when the imports were contracted to Halliburton, the Texas oil services giant formerly headed by Vice President Dick Cheney.