For Iraq’s Motorists, It’s Abundance by the Drop

Despite having the world’s second-largest reserves of oil, Iraq announced Monday that it would 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 has 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 the nation’s needs.

Announcing the measures Monday, Oil Minister Ibrahim Bahr 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 responsible for drafting the nation’s new constitution refused their last chance to request a formal extension of the Aug. 15 deadline.

Humam Hamoodi, head of parliament’s constitutional committee, said members were “willing to work day and night” to find compromises on thorny issues such as federalism, the distribution of oil revenue and the role of Islam in law.

Leaders of several parties plan to meet Friday to evaluate the committee’s progress and hash out disputed points. The leaders will have a week to debate and cut deals, Hamoodi said, and should refer the approved document back to the constitutional panel for final technical adjustments before it moves to the transitional 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 necessary concessions.

“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 region in the north, 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 federal 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 election wants Sharia to be identified as “the source” of legislation rather than one of several sources.

Despite the stumbling blocks, U.S. Ambassador Zalmay Khalilzad said it appeared that the assembly would not seek to extend the deadline for drafting a constitution. He acknowledged that the U.S. 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 that 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 product 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 gas line snake past his copy shop Monday. “It’s unbelievable.”

Iraqis also worried that the rationing system would promote a new underground economy based on the sale of ration cards. But Iraqi officials said a gas rationing system was in place in the Kurdish north and has led to a 30% drop in demand.

Oil industry experts said several factors were behind the fuel predicament.

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

Iraq’s internal fuel production system was weakened as demand soared. Iraqis went on a car-buying spree after the invasion, almost doubling the number of vehicles on the road to 2.1 million, according to the government.

Demand was further increased by the electricity crisis. With electric power in short supply, many Iraqis purchased small generators that used diesel fuel. At the same time, the government increased its own fuel consumption to boost electrical production. This summer alone, the Iraqi government has committed itself to spending $150 million on diesel fuel.

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 Uloum, the oil minister, said his agency was working with police to arrest as many smugglers as possible.

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Times staff writer Suhail Ahmad contributed to this report.