This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 BAGHDAD 004998 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958:  N/A 
TAGS: EPET ENRG ECON IZ
SUBJECT:  IRAQI ENERGY SECTOR STATUS ON ELECTION EVE 
 
REF:  BAGHDAD  4851 
SENSITIVE BUT UNCLASSIFIED - GOVERNMENT DISTRIBUTION ONLY 
NOT FOR INTERNET DISTRIBUTION 
 
 
¶1.  (SBU) SUMMARY: Electricity and fuel supplies in Iraq 
remain very limited.  The GOI continues to have problems 
paying for imported fuel supplies from Kuwait and Turkey. 
The GOI again permitted arrears to Turkish and Kuwaiti fuel 
suppliers to mount with the former threatening a fuel 
shutoff. Partial payments on arrears of $600 million have 
been promised after the election.  Al Fathah pipeline 
crossing construction across the Tigris is progressing, with 
pipelines now installed.  These pipelines may be placed in 
service by late January 2006.  Al Fathah upgrade will enable 
expansion of oil exports from northern Iraqi oil fields. END 
SUMMARY. 
 
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FUEL STATUS 
----------- 
 
¶2.   (SBU) Fuel supplies across Iraq remain short.  The 
supply in Baghdad is still low, but improved from late 
November.  Reported days of fuel supply in Baghdad are as 
follows:  gasoline--2.7, kerosene--19.5, diesel--1.3, and 
LPG--2.7.  Countrywide supplies, though quite unevenly 
distributed are as follows: gasoline--4.9, kerosene-- 
7.1, diesel--3.3, and LPG--15.1.  The most consistently 
supplied areas of the country are Baghdad, and Basrah.  In 
the remainder of the country many fuel stations are 
intermittently empty of fuel between deliveries.  The 
regions shortest on fuel supplies are Kurdistan, Anbar 
Province, and south-central Iraq. 
 
¶3.  (SBU) A verified report from a Civil Military Operations 
fuel officer said the local government in Al-Kut has issued 
a verbal and written statement to a fuel-supply trucking 
firm that they will commandeer all tankers coming through Al- 
Kut to Baghdad.  Apparently the governor has requested more 
fuel from Baghdad and had been denied. Nationwide, black 
market prices for fuel remain five to ten times the official 
prices for all types of fuel, and fuel continues to be 
generally available from this source. 
 
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FUEL PRICES 
----------- 
 
¶4.  (SBU) Prices for fuel at gas stations in major cities in 
Iraq reflect the Ministry of Oil (MOO) increased price 
schedule. Anecdotal reporting from Baghdad, Basra, Kirkuk 
and Mosul indicate official government gas stations are 
pricing regular gasoline at $.13-$.15/gallon.  These prices 
are somewhat lower than product prices expected by the IMF. 
However, Minister of Finance (MOF) evidently submitted new 
fuel prices as expected by the IMF without approval of the 
MOO. This issue went to the Prime Minister for decision. 
Deputy Minister of Finance Kamal Fields Al-Basry informed 
the Treasury Attach that the increases would go into effect 
on the date and in the amounts that the IMF expects. 
 
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FUEL PAYMENTS STATUS 
-------------------- 
 
¶5.  (SBU) The GOI continues to have problems paying for 
imported fuel supplies from Kuwait and Turkey. Turkish 
arrears are reported at $600 million and total bills exceed 
$800 million to Turkish firms.  Dr. Radhwan, Finance 
Director General (DG) for Ministry of Oil (MOO), said the 
Ministry of Finance (MOF) is providing a greater 
allocation to the MOO/SOMO (State Oil Marketing 
Organization) for future fuel imports payments that may help 
reduce the monthly accumulation of arrears.  He discussed 
the issue with MOF December 12 and said GOI should have the 
arrears payments to Kuwait and Turkey settled after the 
election.  DG for SOMO and the Minister of Oil are both in 
Kuwait this week and will return on Wednesday, December 14. 
(NOTE: The government is shut down until Sunday, December 
¶18.  We do not expect any action to be initiated until that 
time.  END NOTE) 
 
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ELECTRICITY STATUS 
------------------ 
 
¶6.  (SBU) Baghdad's hours of power increased to 9 hours 
December 12 after two weeks at 4-5 hours a day, while 
Basra's hours of power step increased to 17 hours from 13 
hours.  Nationwide average hours of power increased to 13 
hours.  The rotation schedule was 2 ON/ 4 HRS OFF for 
Baghdad and for the rest of Iraq, 3 HRS ON/ 3 HRS OFF.  149 
MWs of power were transferred from the South Region to the 
Central (Middle) Region. The North and West Regions sent 295 
MW to the Central Region. The addition of the V.94 generator 
at Kirkuk to the grid also increased the power transfers 
from the North. This accounts for the slightly better power 
situation in Baghdad. Baghdad consumption was 23% of the 
nation's output.  Iraq average MW availability was 3864 MWs. 
The 400 KV lines remain the weak links in the Iraqi grid. 
The Bayji to Baghdad lines are under repair, with one under 
stress, but still functioning and the other interdicted. 
The Bayji to Kirkuk line was repaired and then interdicted 
again on Dec 10.  The Mussaib line to Baghdad was repaired 
on Dec 12. Repairs for the major lines from Bayji are 
scheduled for later in December. 
 
¶7.  (SBU) The shortfalls in electricity across Iraq are 
partially compensated by the presence of neighborhood and 
household generators.  These generators of electricity are 
used to replace the power when the electricity is rotated 
from sector to sector in the large cities and in the rural 
areas.  There are a reported 1-1.5 million small generators 
in Baghdad used at the household level.  There are 10-12,000 
neighborhood generators in Baghdad, which supply groups of 
houses and businesses with higher amperage replacement power 
when the grid power is switched off to their sector of town. 
 
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AL FATHAH CROSSING 
------------------ 
 
¶8.  (SBU) The Al Fathah oil pipeline crossing is currently a 
good news story with the successful laying of the pipelines 
across the Tigris River.  The tie-ins of the replacement 
pipelines along the Kirkuk to Bayji corridor are expected to 
be completed by the end of January 2006.  These lines still 
need to be connected into the national pipeline network 
through connectors on the west side of the Tigris River. 
The completion of the tie-in of the pipelines will enable 
the production of crude oil in the Kirkuk oil fields to 
expand and the export of oil through the Iraq-Turkey 
pipeline to the port of Ceyhan on the Turkish coast.