Government decides to increase gasoline prices amid public concern

BAGHDAD — Iraq’s government decision on March 26 to increase the prices of premium and super gasoline, effective May 1, 2024, has ignited public debate and raised concerns over potential protests.

The hike will see premium gasoline surge to 850 dinars per liter (around 60 cents) and super gasoline to 1250 dinars (90 cents) per liter from the specified date.

The rationale behind the move, as stated by the government, is to alleviate traffic congestion and curb uncontrolled vehicle movement, particularly in major cities.

This decision aligns with ongoing demands from the International Monetary Fund for Iraq to reduce fuel subsidies as part of broader economic reform efforts.

Economist Mustafa Hantoush explained to 964media, “Iraq imports over 85 percent of its premium gasoline, hence the liter’s price in 2019 was 850 dinars. With global oil prices high, Iraq incurs significant losses selling premium gasoline at 650 dinars per liter.”

However, the impending fuel price hike is anticipated to place a heavy burden on Iraqi citizens, increasing transportation costs and overall expenses.

Despite this, economists view the move as a response to the government’s escalating expenditures, characterized as “explosive” over the past three years. However, there is optimism that new oil refineries like the one in Karbala, although currently operating at 35% capacity, could alleviate the fuel import crisis and provide a solution to the current economic difficulties once they reach full capacity.

Economic expert Duraid Al-Anzi emphasized the decision’s primary aim to “reduce vehicle numbers and traffic congestion,” but he anticipates “adverse outcomes for the government,” including potential widespread protests across the country.

Critics argue that the decision exposes a flaw in the government’s economic strategy and will significantly impact citizens, particularly since the price hike is not accompanied by compensatory measures such as salary increases or loans. Al-Anzi suggested that internal government expense reduction plans, such as decreasing the number of government vehicles, should precede such price increases.

Improving public transportation has also been suggested as a potential solution to address the increase in gasoline prices.

Sara Al-Salhi, a member of the Parliamentary Integrity Committee, has officially called for the formation of a special parliamentary committee to investigate the reasons behind the price increase and its anticipated effects on citizens.

This request was formally submitted in an official letter to the Parliament’s leadership body on Wednesday. In response to the government’s decision, the “Harakat Waey al-Wattaniyah” (National Awareness Movement) Bloc issued a scathing statement on Wednesday, criticizing the government for deviating from its approved program, alleging that the government’s achievements were “fictitious and fabricated by a chorus of sycophants.”