Iraq to up fuel imports for 2006

Iraq's infrastructure has suffered years of under-investment

Iraq is planning on spending some $800m (£422m) on importing oil in 2006, to counter a fuel shortage, the government has said.

Despite having the third largest oil reserves worldwide, Iraq is facing a severe petrol, kerosene and cooking gas shortage.

Insurgent attacks on pipelines after years of under-investment have damaged essential energy infrastructure.

Iraq currently imports oil from Iran, Turkey, Syria and Kuwait.

'Strategic assets'

Iraq's three main oil refineries are only running at half their capacity, refining about 350,000 barrels per day from the daily 700,000 barrels per day before the US invaded Iraq in March 2003.

The $800m expenditure will "help resolve the fuel shortage and will improve our strategic assets of oil products," said Iraq's Oil Minister Hussein al-Shahristani.

The shortage has made the cost of petrol for the ordinary Iraqi expensive - in August a litre hit $1.3 on the black market far in excess of the official 17 cents it should have been sold for.

Around 80 trucks carrying oil are already being transported daily from Syria to Iraq, according to Mr Shahristani.

Meanwhile, Iraq is discussing the option of letting Turkish trucks gain access through a different part of the border to import oil.