Drivers want government oversight as gas prices rise in Kurdistan

By Chris Johannes and Zhelwan Z. Wali

 

ERBIL, Kurdistan Region — Increased fuel prices have been passed on to Kurdistan's commuters, and taxi drivers do not see the prices of more than 750 dinars per liter as sustainable, so they are asking regional authorities for more oversight.

 

Salih Sabir and his seven family members depend the daily earnings from shuttling people around the city in his Toyota Corolla taxi.

 

"The price of gasoline has hiked, we have not increased our taxi fares which hover only around 3,000-5,000 inside Erbil, despite the economic crisis which almost killed all of us," Sabir added, sitting in the tree shade in front of Family Mall waiting for a customer.

 

Prices increased 15-percent in May from about 650 dinars ($0.54) for normal grade fuel to around 750 dinars ($0.63). The prices can be more expensive in high-traffic areas and for higher-grade fuels.

 

"The maximum I make a day is 30,000 dinars (about $25), half of which goes to buying gasoline," explained Sabir.

 

Nasraddin Fathulla, another taxi driver in Erbil criticized increasing gas prices.

 

"We are asking the government to find a solution for this crisis and assist the poor people," Fathulla said.

 

He expressed that they will be put out of business if prices continue to increase.

 

The Kurdistan Region lacks a reliable and robust public transportation system, leaving most to rely on taxis or buy or lease vehicles to go to their jobs.

 

Karzan Yaba, a driver, was pessimistic. He doesn't see the situation improving because it would not be in the interest of some "stingy businessmen" to decrease the price of gasoline.

 

Filling stations like this one in Erbil were taking a 10 dinar loss, buying gasoline for 710 dinars and selling it for 700 dinars to not lose customers on May 24, 2018. Photo: Chris Johannes | Rudaw

 

At Akar filling station in Erbil, they also called for more oversight by the Kurdistan Regional Government (KRG) to stem the rising costs for consumers.

 

“Lack of monitoring from the government is the main reason behind the price of oil being tampered with. And since the sector has been privatized, it has become easy to be manipulated by businessmen,” the head of the Administration Department of Akar Oil, Mohammed Kanabi, told Rudaw English.

 

In 2014, there were 20 gas stations across the city of Erbil. Then, the government decided to privatize the oil sector.

 

"Now that the government has withdrawn from this businesses and left it for the private companies such as KAR and its three branches, people have been negatively affected,” explained Kanabi.

 

He purchased fuel from KAR for 710 dinars per liter in May, but was charging just 700 dinars "so I do not lose my customers all of a sudden."

 

Mohammed Kanabi, the head of the Administration Department of Akar Oil, is urging the government to act to prevent rising fuel prices in the Kurdistan Region. Photo: Chris Johannes | Rudaw

 

Brent crude oil traded $50 per barrel at this time last year. It has flirted with $80 recently. However, while some of the oil from the Kurdistan Region and Iraq is exported, the refined gasoline and diesel, which Akar buys, are refined locally.

 

Iraqi government gas stations in Kirkuk and other disputed areas sell fuel for around 450 dinars.

 

Akar is one of the most well-known gas station chains in Erbil. It expects prices to top out at 800 dinars ($0.67).

 

“In the long run, we will be obligated to increase the price more and more," Kanabi lamented.

 

He assumes this will spark outrage among consumers.

 

“We feel people’s anger," said Kanabi.

 

Rudaw English separately contacted KAR Group and the KRG's Ministry of Natural Resources, but received no response at time of publication.

 

“With shifting the responsibility to deal with petrol from the public sector to the private sector, the quality and price of petrol was controlled by traders. The decline in competition among companies that import petrol from abroad and monopoly in Kurdistan’s petrol market is one reason behind rising prices of petrol,” wrote Bilal Sahid on June 4, an energy expert who regularly contributes to Rudaw.