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

UNCLAS BAGHDAD 005040 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958:  N/A 
TAGS: EPET ENRG ECON PGOV IZ
SUBJECT:  IRAQI FUEL PRICES RISE BEFORE IMF DEADLINE 
 
REF:  BAGHDAD 4998 
SENSITIVE BUT UNCLASSIFIED - GOVERNMENT DISTRIBUTION ONLY 
NOT FOR INTERNET DISTRIBUTION 
 
 
¶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 
Minister Chalabi, the Minister of Finance Allawi, and the 
Minister of Oil Bahr Ulom 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 formal 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.