U.S. subsidies ensure low gas prices in Iraq: “Before the war, forecasters predicted that by invading Iraq and ousting Saddam Hussein, America would benefit from increased exports of oil from Iraq, which has the world?9s second-largest petroleum reserves.

That would mean cheap gas for American motorists and a boost for the oil-dependent American economy.

More than a year after the invasion, that logic has been flipped on its head. Now the average price for gasoline in the United States is $2.05 a gallon – 50 cents more than the pre-invasion price.

Instead, the only people getting cheap gas as a result of the invasion are the Iraqis.

Filling a 22-gallon tank in Baghdad with low-grade fuel costs just $1.10, plus a 50-cent tip for the attendant. A tankful of high-test costs $2.75.

In Britain, by contrast, gasoline prices hit $5.79 per gallon last week – $127 for a tankful.

Although Iraq is a major petroleum producer, the country has little capacity to refine its own gasoline. So the U.S. government pays about $1.50 a gallon to buy fuel in neighboring countries and deliver it to Iraqi stations. A three-month supply costs American taxpayers more than $500 million, not including the cost of military escorts to fend off attacks by Iraqi insurgents.

‘We thank the Americans. They risked their lives to liberate us, and now they are improving our lives,’ said Baghdad taxi driver Osama Hashim, 26, while filling the tank on his beat-up 1983 Volkswagen.

Iraq?9s fuel subsidies, which are intended to mollify drivers used to low-priced fuel under Saddam, have coupled with the opening of the borders to create an anarchic car culture in Baghdad.

Cheap used cars shipped from Europe and Asia are flooding into Iraq. A 10-year-old BMW in good condition costs just $5,000. Since gas is so cheap, anyone with a car can become a taxi driver. Drivers jam the streets, offering rides for as little as 250 dinars – about 17 cents.

Iraq has no sales tax, no registration, no license plates and no auto insurance. Some would argue there are no rules of the road. Cars barrel the wrong way on the highway. They swoop into surprise U-turns. They ignore traffic signals.” (Columbia Tribune [via walker])