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.
The U.S. government paid even more last year for Iraqis' gasoline -- between $1.59 and $1.70 per gallon -- when the imports were contracted to Halliburton, the Texas oil services giant formerly headed by Vice President Dick Cheney.
Analysts say the U.S. gas subsidies can't last forever -- and Iraqis may be in for an unpleasant shock when they end. In the meantime, however, the American taxpayer continues to foot a huge bill.
"The United States controls all Iraqi resources now," said Jenan Jabro, 50, tanking up his black Opel. "So what if they have to pay a little bit for gasoline? That's nothing compared to what they get in return."
Analysts say there never was a good case -- either before the war or afterward -- that a U.S. invasion would pay dividends in cheap oil. "Some of the neo-conservatives might've been saying that, but no energy analysts were walking around saying that," Cordesman said.
Iraqis Paying 5 Cents a Gallon for Gas:
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