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Iraq to ration gasoline amid fuel shortage

BAGHDAD, Iraq – Despite having the world’s second-largest reserves of oil, Iraq announced Monday that it will begin rationing gasoline over the next few months to cope with an ongoing fuel shortage.

Iraqis will be issued ration cards next month allowing them to buy limited quantities of kerosene and cooking gas. Later, they will face restrictions on gasoline purchases.

Increased demand for fuel and the failure of the U.S.-led reconstruction effort to restore refining capacity have led to chronic shortages, resulting in long lines and short tempers at gas stations. The government has been spending millions of dollars a month to import fuel to meet demand.

Announcing the measures Monday, Oil Minister Ibrahim Bahr al-Uloum said the aim “is to make sure that each citizen gets his share of gas. This will lessen the suffering of Iraq.”

The restrictions came as Iraqi politicians charged with drafting the nation’s constitution refused their last chance to request a formal extension of the Aug. 15 deadline.

Humam Hammoudi, head of Parliament’s constitutional committee, announced that members are “willing to work day and night” to find compromises on thorny issues such as federalism, the distribution of oil revenues and the role of Islam in law.

Top party leaders are to meet Friday to evaluate the committee’s progress and personally hash out points of dispute. The leaders will have a week to debate and cut deals, Hammoudi said, and should refer the approved document back to the constitutional committee for final technical adjustments before it moves to the National Assembly for a vote.

Committee members said the group had deadlocked because the Shiite Muslim, Sunni Arab and Kurdish representatives did not have the authority to make the major concessions necessary.

“These have to come from the leaders,” said Abbas Bayati, a Shiite committee member. “The issues of contention are still there and waiting for the leadership meeting.”

These issues include the extent of autonomy granted to the Kurdish north of the country, the status of the disputed northern oil center of Kirkuk and the extent to which Islamic Sharia law will hold sway.

Kurds have pushed for a federalist system with a comparatively weak central government, and they want to retain the majority of Kirkuk’s oil revenue. The Shiite Muslim bloc that captured the most votes in January’s elections wants language that identifies Sharia as “the source” of legislation rather than one of several sources.

Despite the stumbling blocks, U.S. Ambassador Zalmay Khalilzad said that “all indications” were that the assembly would not seek to extend the deadline for drafting a constitution. He acknowledged that the United States was leaning on Iraqi leaders to pass the constitution by the deadline.

“Other countries have gone through the processes of putting a constitution together,” said Khalilzad, who was ambassador to Afghanistan when its constitution was passed. “The Iraqis, I applaud them in particular because they are doing it in such a short time, while they’re dealing with a lot of other difficult issues.”

One of those issues was the fuel rationing plan, which left many Iraqis aghast Monday.

Some people said the ration cards would make it even more difficult to obtain fuel. Currently, they must stand in gas lines for hours or purchase higher-priced gas from black marketeers who hover alongside dusty roads hawking their gas from jerry cans.

“Do you believe that this country … would suffer from an oil crisis?” asked Mazen Abdul Aziz, 52, a mechanical engineer who watched a half-mile long gas line snake past his copy shop Monday. “It’s unbelievable.”

Iraqis also worried that the rationing system would promote an entirely new underground economy in the sale of ration cards. But Iraqi officials said a gas rationing system currently exists in the Kurdish north, and it has resulted in a 30 percent drop in demand.

Oil industry experts said several factors were behind the gas crisis.

First, Iraq’s refining capacity was badly damaged by looting after the March 2003 invasion, and U.S. and Iraq reconstruction efforts have failed to restore the refineries to full capacity. The oil ministry announced plans Monday to build two new major refineries at a cost of up to $1.4 billion.

The destruction of the country’s internal fuel production system came as demand soared. Iraqis went on a car-buying spree after the invasion, doubling the number of vehicles on the road from 1.1 million to 2.1 million, according to government figures.

Demand was further increased by the country’s electricity crisis. With electricity in short supply, many Iraqis purchased small generators that use diesel fuel. At the same time, the government increased its own fuel consumption to step up electrical production. This summer alone, the Iraqi government has committed to spending $150 million on diesel fuel purchases.

Finally, Iraqi gas sells at dirt cheap prices, as little as 5 cents a gallon. That has encouraged a thriving smuggling business, with contraband shipped to neighboring countries where gas prices are higher. Bahr al-Uloum, the oil minister, said that the ministry was working with police officials to increase arrests of smugglers.