Generator fuel prices cut by half for three months ahead of summer in Iraq

BAGHDAD — Iraq’s Ministry of Oil has announced a 50% fuel subsidy for private generator operators for three consecutive months, saying the measure is intended to ease pressure on households during the summer electricity season.

The Council of Ministers approved supplying each generator with 40 liters of fuel per kilovolt at 200 Iraqi dinars ($0.13) per liter, down from 400 dinars ($0.26). Ministry spokesperson Sahib Bazon said the decision would place “major financial burdens” on the ministry but falls “within the framework of the government’s commitment to serving citizens and supporting private generator owners because of their role in supporting the stability of the electrical energy system.”

Private neighborhood generators remain a primary electricity source for many Iraqi households during summer, when national grid supply often declines and temperatures regularly exceed 50 degrees Celsius in Baghdad and southern governorates. Residents typically pay monthly subscription fees based on amperage, though many families cannot afford enough supply to run air conditioning for extended periods.

Earlier this year, Baghdad’s Provincial Council called for increased fuel allocations and lower prices for generator operators after the Ministry of Electricity warned that power supply hours could fall during summer. Officials said operators were struggling to hold subscription prices steady while buying fuel at commercial rates.

Iraq’s electricity sector has faced additional pressure following disruptions to Iranian gas supplies, which contributed to a drop in national production. Authorities have since explored alternatives including floating liquefied gas terminals, increased electricity imports from neighboring countries and expanded solar energy projects.

In the Kurdistan Region, authorities have pursued a separate strategy through the Runaki project, which aims to provide 24-hour electricity and reduce dependence on private generators. The Kurdistan Regional Government says nearly 5.5 million residents now receive uninterrupted electricity under the program, with thousands of diesel generators phased out across the region.