While Americans are shelling out record prices for fuel, Iraqis pay only about 5 cents a gallon for gasoline -- a benefit of hundreds of millions of dollars subsidies bankrolled by American taxpayers. Before the war, forecasters predicted that by invading Iraq and ousting Saddam Hussein, America would benefit from increased exports of oil from Iraq, which has the world's second largest petroleum reserves. That would mean cheap gas for American motorists and a boost for the oil-dependent American economy.
More than a year after the invasion, that logic has been flipped on its head. Now the average price for gasoline in the United States is running $2.05 a gallon -- 50 cents more than the pre-invasion price. Instead, the only people getting cheap gas as a result of the invasion are the Iraqis.
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.
http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2004/06/05/international1310EDT0542.DTL
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