Iraq, Iran battle fuel black market

BAGHDAD, Oct. 23 (UPI) -- Iraq has cut fuel subsidies to meet international funding deals and battle the black market, which has increased smuggling from Iran, where prices are lower.

Iraqis used to get gas on the cheap, thanks to a subsidy program issued by the government. Just two years ago it cost 12 cents per gallon at the pump.

Gas is about $1.22 per gallon currently officially. IraqSlogger.com reports it higher, however, since most people obtain gas on the black market.

In its weekly survey of nine Baghdad neighborhoods this week, IraqSlogger.com reports all nine show gas prices at least double that of the state set price. Those prices were a decrease from the week before.

The gradual lifting of subsidies is being demanded of Iraq by the International Monetary Fund and other countries and institutions either forgiving Saddam-era debt or granting new loans.

There still is a substantial black market in Iraq, where smugglers take the cheaper gas and either resell it in country or abroad, where prices are higher.

In neighbor Iran, however, gas sits at 40 cents per gallon, The Dallas Morning News reports. And while Iraqis are slowly coming out of the gas shortage, Iranians are being rationed gas. The Iranian black market is booming, as Iranian gas is being sent to Iraq to be sold.