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Senator aims to reduce Iraq budget

A US Democratic senator has said he will try and strip $200 million from the White House's Iraq budget request after a non-partisan report shows the estimate for

Last Modified: 19 Oct 2003 09:49 GMT
The realistic price for oil supply is nearly $200 million less than is being quoted

A US Democratic senator has said he will try and strip $200 million from the White House's Iraq budget request after a non-partisan report shows the estimate for imported oil is too high.

The Congressional Research Service, in a report dated 8 October sent to the Senate Energy and Natural Resources Committee, said the $900 million budget proposal for importing fuel into oil-rich Iraq seemed too high based on current fuel prices.

   

"It would seem that the CPA (Coalition Provisional Authority) is asking for substantially more money than is called for by current fuel prices in the Persian Gulf trading area," the report said.

   

The report's estimate follows Democratic lawmakers' contentions on Wednesday that Halliburton, the oil services firm once run by Vice President Dick Cheney, is overcharging for oil products imported into Iraq.

   

Defence

 

The Texas-based firm, which has so far received more than $1.4 billion in work in Iraq to repair and restore the country's oil industry under a no-bid contract issued in March, has defended its pricing as fair.

   

Democratic Senator Ron Wyden said that, based on the report, he would propose an amendment to the Senate on Friday that would slash $200 million from the $900 million oil imports request included in the president's $87 billion Iraq request.

   

"It's clear that a non-partisan source believes that the spending is excessive and the taxpayers are being overcharged. That's wrong and that's what I am going to ask for tomorrow," the Oregon senator said.

 

"It's clear that a non-partisan source believes that the spending is excessive and the taxpayers are being overcharged"

Ron Wyden
Democratic senator

A spokesman for the CPA said the US-led administration stood by its estimate, which included a variety of costs.

   

"The cost involved includes not only the price of gasoline but also security for personnel and the transportation costs for getting the gas into a hostile environment, shipping and storage," he said.

 

Support

   

Wyden won support from both Democrats and Republicans for another amendment that sought competitive bidding on all Iraq contracts and said he hoped to do the same again.

   

Taking current spot market prices into account, the research service estimated that $704 million was a more realistic price than the $900.6 million requested.

   

If that fuel were available as a contribution from another country in the region, the estimate would be about $652 million, the report said.

   

Depending on the figure used, the difference between the estimates made by the research service and the CPA request were either $197 or $249 million, the report said.

   

Two leading Democratic lawmakers had written to the White House Office of Management and Budget on Wednesday to complain that Halliburton was overcharging for oil products.  

Source:
Reuters
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