The UNJLC Iraq Fuel Bulletin aims to provide a clear and concise periodic overview – usually weekly – of the situation as it exists in Iraq with regards to the oil industry. It focuses on the availability of fuels, particularly as they affect the welfare of the populace and related humanitarian work. It further seeks to identify major issues for the humanitarian community and other interested parties, to provide relevant background and constructive recommendations on current issues, and to alert responsible parties to emerging issues in the crisis so that they may be addressed in good time. The UNJLC Iraq Fuel Planning Team presently has dedicated representatives in Baghdad, Basra and Erbil. For further information please contacted info@unjlc.org.

Contact details for all UNJLC offices are available here.

• OVERVIEW
• Refining
• Diesel
• Gasoline
• Liquid Petroleum Gas (LPG)

OVERVIEW The lack of security and effects of ongoing looting, combined with the lack of spare parts, tools and primary materials, continue to delay recovery of the oil industry. Damage from indigenous looting far exceeds that caused directly by the conflict. Sabotage is also becoming a greater problem. Much of the industry infrastructure and equipment was dilapidated, poorly maintained and affected by limited supply of spare parts and materials due to sanctions before the war. Although there are many capable and professional engineers and managers in the industry, they have not had the capital funds or the tools and supplies to maintain the industry as it should be. The lifting of U.N. and separate U.S. sanctions in May has raised expectations but there has been insufficient time for this to translate into meaningful improvements in spares and materials supply, or availability of fuels. Exports of crude oil have recently commenced mainly from the 8 million barrels of pre-war inventories held at Turkey’s Mediterranean Port of Ceyham, with limited exports through the Arabian Gulf. Both are crucial as they free up storage space for new production. The Ministry of Agriculture has requested priority allocation of oil and gas for wheat harvesting.

Refining

Basrah Refinery has increased production after bringing a second train on line last month, effectively doubling output. However, the Baiji Refinery, near Baghdad, is now in a planned maintenance phase which has shut down most operations. This will lead to heavy tanker traffic between Basrah and Baghdad in the coming weeks.

Diesel

Strategic stocks of diesel remain adequate, even high, but distribution is poor. Illegal tapping of pipelines in various areas continues to be a problem and is unlikely to cease until security is restored. Allocation priorities are centrally planned through consultations between the Oil Minister and other Ministries, with a formal letter between Ministries necessary to release stocks. However, diesel is generally available in most operational outlets.

Gasoline

Production of gasoline is about half of the total daily requirement but distribution remains uneven. For example, availability in Baghdad exceeds pre-war levels but has declined in many other areas. This is creating tensions and potential security problems. Production has increased to the highest level since the end of hostilities with small plants such as one at Nassirya processing what is known as a “skimmed product” that requires minimal refining at around 10,000 barrels per day for local consumption. A similar plant will open shortly in Amara.
A key additive used in the domestic production of gasoline is Tetra Ethylene Lead (TEL), as Iraq still uses leaded petrol, not having converted to unleaded fuels. The JLC has in conjunction with the Oil For Food Programme in New York fast tracked supplies either with the supplier or in the pipeline with shipments for about 6500 tons from U.K. and Russia expected to arrive in Iraq from the last week of June onwards. This will improve gasoline supplies. However the current stocks of TEL are critically low; unless the gap is filled before the new stocks arrive, further shortages will occur.

Liquid Petroleum Gas (LPG)

LPG is the main fuel used for cooking in Iraq. Supply is extremely poor, although improving, but requires more attention. Major plants at Basrah (Khor Zubair) and Kirkuk are both working at a very low capacity. Supply from the country’s second most important plant at Baiji, near Baghdad, with a capacity of 2,000 tons per day, will be affected by the planned maintenance programme for the adjacent refinery which will place it offline this month. The Khor Zubair plant has a production capacity of around 270 tons per hour but this will be difficult to realise as the refrigeration plant requires a charge of 100 tons of pure propane for start up. This is exacerbated by serious damage to the electrical system from looting. It is evident from a site visit to the plant that it will be unable to produce substantial quantities until at least early August

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ABOUT UNJLC
UNJLC is an inter-agency facility reporting to the Humanitarian Coordinator for Iraq and generally to the Inter Agency Standing Committee. Its mandate is to coordinate and optimise logistics capabilities of humanitarian organisations in large scale emergencies. UNJLC operates under the custodianship of WFP that is responsible for the administrative and financial management of the unit. UNJLC is funded from voluntary contributions that are channeled through WFP. The UNJLC project document for Iraq can be viewed at the UNJLC website (www.unjlc.org).