By Ben Gilbert
Baghdad
03 January 2006

Iraq's oil production has dropped sharply because of insurgent attacks and bad weather, raising the prospect of energy shortages. Meanwhile, the country's oil minister confirmed Monday he has resigned his post after a disagreement with the government over sharp price hikes in petroleum products.

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Iraqis queue at a gas station in al-Sadr city, Baghdad, Iraq, Monday Jan. 2, 2006  
  

Across Baghdad Monday, gas lines snaked from gas stations to main roads, to side streets and down alleys. Long lines of cars snarled traffic and raised a sense of crisis.

Mohammed Jaffer joined the line at three in the afternoon and said he is expecting a wait of between three and seven hours. "This is not normal. The normal is when electricity is available so this cue it will be very short," he said. "There is no electricity so people are coming to collect petrol for their generators. "

Mr. Jaffer says he has to shut his store early and come to the gasoline station at least three times a week now, because the supply of electricity is so bad. A fuel shortage caused by a security threat at Iraq's largest refinery in Baiji caused the electrical generation in Baghdad to fall from six hours per day to one hour over the weekend.

Last week, insurgents in the area around the Baiji plant had threatened to kill tanker truck drivers and gasoline suppliers. The Iraqi army has now been dispatched to protect the supply routes, and the plant reopened two days ago, an oil ministry spokesman said.

The insurgents may have been looking to further inflame Iraqi's anger at the government over fuel increases that sent prices skyrocketing just after the country's December 15 elections.

Oil Minister Bahr al-Aloum quit over those price hikes, because they made gasoline too expensive for poor Iraqi families. He said the government originally planned to double or triple the prices, but the International Monetary Fund pushed for a five-fold increase as part of its debt forgiveness plan.

"We have to make a balance between IMF requirement as well as situation of Iraqi people, especially poor people…their economic lives and their political lives," he said.

Deputy Prime Minister Ahmed Chalabi will serve as acting oil minister for at least 30 days. The former minister said Saturday Iraq had fallen short of its goal for oil production for the year. The country had aimed to produce an average of 2.5 million barrels per day by the end of 2005. But sabotage and bad weather caused production levels to fall below the pre-war level of 1.6 million barrels over the past two months.