Gas prices and discontent rising in Iraq

WASHINGTON — In what is seen as an unavoidable trade-off, Iraq’s acting government is risking public anger by ramping up gasoline prices to boost revenues and reduce a gas-smuggling trade that is helping to fund the insurgency.

Heavily subsidized since the days of Saddam Hussein, the price of gas has risen from about 5 cents a gallon to 10 cents a gallon, and is expected to rise dramatically in the coming months, despite the threat of street protests and other signs of discontent.

Robert Silverman, director of the State Department’s Office of Iraq Economic Affairs, told an audience at Rice University’s James A.Baker III Institute for Public Policy on March 30 that he expected the price to reach 50 cents a gallon by the end of the year.

Several violent demonstrations greeted an announcement in December that prices would be boosted, and it is not clear how the further price increases will be received in a country where driving is popular and the average annual income is about $1,500.

Washington Times