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

UNCLAS BAGHDAD 005039 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EPET ENRG ECON PGOV IZ
SUBJECT: IRAQI FUEL PRICES RISE BEFORE IMF DEADLINE 
 
REF: BAGHDAD 4998 
 
 ¶1.  (SBU) SUMMARY: The Government of Iraq (GOI) formally 
initiated fuel price increases across Iraq on December 18. 
These fuel price increases meet an essential IMF prior action 
for a Stand by Arrangement with Iraq.  Demonstrations were 
reported in multiple locations in response to the price 
increases.  The GOI informed us the price rises would stand 
in spite of the negative response of the demonstrators.  The 
Deputy Prime Minister and the Ministers of Finance and Oil 
held an unscheduled press conference to calm the populace and 
explain the reason for the increases in the price of fuel. 
END SUMMARY 
 
 
¶2.  (SBU) The GOI officially initiated fuel price increases 
across Iraq on December 18.  The price increase policy was 
implemented nationally to meet the IMF requirements according 
to Musab Al Khateeb, Chief of Staff of the Ministry of 
Finance.  New prices in Iraqi Dinar (ID) per liter are as 
follows: LPG (Standard Cylinder)--600 ID ($.40), regular 
gasoline--150 ID ($.10), premium gasoline--250 ID ($.16), 
kerosene--25 ID ($.016), diesel--90 ID ($.06). 
 
¶3.  (SBU) Demonstrations against the new fuel prices were 
reported in the press at Al Kut and An Najaf.  Concern about 
demonstrations and further unrest caused Deputy Prime 
Ministers Chalabi and Shawys, the Minister of Finance Allawi, 
and two other ministers to hold an unplanned joint press 
conference at 4:30 PM December 18 to calm the populace and 
explain the price rises.  In a vivid demonstration used to 
show how cheap fuel is in Iraq, a bottle of water was used as 
a prop, with the accompanying comment that a bottle of fuel 
was cheaper.  The point was also made that this price reform 
is a necessary part of fixing the economy of Iraq. 
 
¶4.  (SBU) Price reports from gas stations and provincial 
officials in Hillah/Najaf and Tikrit provide additional 
confirmation of the initiation of the new prices for fuel 
across Iraq. No variations from the official government 
prices were reported. The Ministry of Oil reportedly is 
sending 200 technicians out across Iraq to adjust the prices 
on the pumps at the gasoline stations. That process is 
expected to take a week. 
 
KHALILZAD