The US Defence Department has taken away a contract to supply fuel to the US military in Iraq from Halliburton, the energy giant at the centre of accusations of inflating prices.
The military said on Wednesday the Defence Energy Support Centre (DESC), a Pentagon agency, and the Iraqi oil ministry would organise a tender for the supply of petrol and other fuel to US troops in Iraq.
Pentagon officials, quoted by US media, said there was no link between the change and accusations that a Halliburton subsidiary, Kellog, Brown and Root (KBR), may have overcharged for fuel by $61million.
Halliburton, which used to be run by Vice President Dick Cheney, has strongly denied the allegations. An investigation into the accounts is still being carried out.
More violations found
"The center will strive to put competitively awarded contracts in place as quickly as possible for this mission," said DESC director Richard Connelly.
The current contract will remain in action to ensure continuity of supplies, according to the DESC.
Other suspected violations of Iraq contracts awarded to Halliburton firms were also found in the audit, officials said, quoting the Defence Contract Audit Agency (DCAA).
According to the preliminary audit by Defence Department investigators, KBR charged $2.27 a gallon (3.78 litres) of petrol delivered to Iraq. A similar contract from Turkey would have cost $1.18 a gallon.