No, this isn’t about the war, but the situation is indeed insane.
Drivers in Baghdad, the capital of a country with the
world’s third largest oil reserves, can now use their cars only on
alternate days because of the continuing petrol shortages.
Under
a new government directive that has left residents furious and traffic
police complaining that the plan is unenforceable, cars with odd
numbers at the end of their registration plate will be allowed on the
roads one day and those with even numbers the next.
How can there be petrol shortages in a country with so much oil?
Iraq has 115 million barrels of proven oil reserves, third after Saudi Arabia and Canada.
But
insurgent attacks against pipelines and the lack of a domestic refining
ability have resulted in the present mess. Iraq and United States
officials have previously reported that in the first 10 weeks of this
year the country’s oil infrastructure was sabotaged 30 times and it is
still producing at far below maximum capacity.
Well, that’s part of it. Economist types might want to point to this:
To add to the problem the country’s abundant oil reserves meant that
under Saddam petrol was heavily subsidised and it would provoke a
national outcry if prices rose so fuel still costs only 2p a litre. As
a result corruption and smuggling is rife with -criminals taking
supplies intended for petrol stations abroad or selling it on the black
market at 10 times the official price.
Yup, thought so. To get to such an absolutely insane position there had to be a government decision somewhere. The whole damn point about free markets is that prices adjust so as to balance supply and demand. They should simply stop the subsidies.
Leave a Reply