Iraq Petroleum Crisis Bahr Al Ulum

Iraq Petroleum Crisis
Bahr al-Ulum Forced Out

Drivers in Baghdad are waiting in lines a quarter of a mile long, according to the NYT, as the country faces a fuel crisis. They feared further price increases, and were also stocking gasoline to run their generators, since electricity provision in the capital has been erratic.

Al-Zaman/ AFP [Ar.] report that Ibrahim Bahr al-Ulum, the minister of petroleum was removed on Friday from his position by Prime Minister Ibrahim Jaafari after Bahr al-Ulum had protested the tripling of fuel prices. Jaafari handed the running of the ministry over to his deputy premier, Ahmad Chalabi, given that he was already chairman of the Energy Council in Iraq. Chalabi is only expected to serve in this capacity for a month or so.

[That’s what the Arabic article says, folks. All this time, Chalabi has been chairman of something called the “Energy Council.” Or maybed that should be translated “Energy Taskforce”? :-) Chalabi was convicted in Jordan for complicity in the failure of his Petra Bank, in which some $300 million disappeared. In a country with poor auditing, the last thing you would want was Chalabi in charge of the petroleum ministry. And, if he has done a good job as chair of the Energy Council, why is the energy sector in Iraq in such a huge mess?

Bahr al-Ulum said, according to the BBC, “I object to the decision of putting me on leave and the mechanism by which it was done after I objected to the government’s decision to raise fuel prices.” He had gone on vacation, and when he got back he was told to go back on vacation for another month while Chalabi took over his job.

Al-Zaman says that its sources in Najaf maintained that Bahr al-Ulum’s firing reflected escalating conflicts among the great Shiite religious authorities and their sons. They point out that Jaafari need not have announced the firing, since Bahr al-Ulum had stopped going to his office, and negotiations are under way on who should head the ministry in the next government. Ibrahim Bahr al-Ulum belongs to a distinguished clerical family in the holy city, but has a technical Ph.D. from the US. He had left the United Iraqi Alliance and ran for parliament in December at the head of his own, small, independent list. He did not gain a seat in the legislature, so he was unlikely to continue in the cabinet in any case. Ibrahim’s father, Muhammad Bahr al-Ulum, is considered a leading moderate cleric, and had served in the American-appointed Interim Governing Council.

Al-Zaman’s sources seem to be implying that Ibrahim Bahr al-Ulum had fallen afoul of the Sistanis. Although Grand Ayatollah Ali Sistani declined to endorse the UIA, he and his clerical colleagues did urge Shiites not to split their vote by supporting tiny local parties. It stands to reason that they were therefore annoyed with the Bahr al-Ulums for breaking ranks, leaving the UIA, and starting a small independent party that might waste Shiite votes. It is probably being implied that since Bahr al-Ulum is from a prominent clerical family, Jaafari consulted with the Sistanis before publicly firing and humiliating him.

[Cole: I doubt that clerical politics is the main dynamic here, though it may have been involved at the margins. Chalabi after all also left the UIA and ran at the head of his Iraqi National Congress, but there doesn't seem to be any strong objection in Najaf to his serving as interim petroleum minister. Of course, he is not from a clerical family and so perhaps not considered under the same discipline.]

A government source said that Bahr al-Ulum protested the tripling of fuel prices because no provision had been made to cushion the poor from it, because it was implemented before it should have been, and because the decision directly contradicted an agreement reached by the cabinet on 6 October before the elections.

The Jaafari government’s decision was forced by demands of the International Monetary Fund, which made a loan of $140 mn. dependent on it, as well as future debt relief. Although Iraq has extremely inexpensive petroleum, and gasoline is now 40 cents a gallon, it also have a very poor population, with vast unemployment and many families that were already barely making it, so that any big increase in the price of any staple hurt. Many Iraqis feel that the subsidized fuel is a way for them to share in the country’s oil wealth. Unlike in Alaska, the general population does not receive a check from the Iraqi government with their share of petroleum income.

Al-Zaman says that the decision to triple prices was met with numerous popular protests, and a number of Shiite provinces in the south have been unable to implement it.

Iraq imports $500 mn. a month in gasoline from neighboring countries, and the amount will probably increase now that terrorist threats have closed the Beiji refinery. (Scroll down).

Al-Zaman/ AFP/Reuters [Ar.]: The stoppage of petroleum exports from the southern port of Umm Qasr continued on Friday owing to poor weather. Only half the normal amount is being exported from Kirkuk through the Turkish port of Ceyhan via pipeline. Pipeline sabotage, the shutting down of the refinery at Beiji, and terrorist acts against electricity plants have contributed to the crisis.

The Iraqi ministry of petroleum on Friday laid the foundation for two new petroleum refineries in the province of Sulaimaniyah in the Kurdistan confederacy, with a capacity of 10,000 barrels a day. The ministry is spending $25 mn. on them. A spokesman from the Kurdistan Patriotic Union said that such projects had been forbidden by the Saddam regime. Two more refineries will be situated in the Kurdish province of Irbil.