Kuwait's energy minister on Thursday said US troops are going to have to start paying for fuel.
In a gift that must have saved the Pentagon a fortune, Kuwait has not charged the US military for fuel since the invasion of Iraq in March 2003.
Tens of thousands of US Humvees, trucks and armoured vehicles have rolled through the country and across the desert border into Iraq during the past two years.
"But now after the Iraqi elections ... we have to create a mechanism for payment," Energy Minister Ahmad Fahd al-Ahmad Al Sabah said.
Kuwait and the US have agreed in principle on the matter, but the price and other aspects are still to be worked out, he said.
Kuwait's decision comes a day
after it summoned the US envoy
The minister did not say when the new system would start and he did not give other details. There was no reaction from the US embassy in Kuwait on Thursday.
Kuwait has been a major ally of Washington since a US-led coalition liberated it from a seven-month Iraqi occupation in the 1991 Gulf war.
The country was the launch pad for the invasion of Iraq in March 2003 and it is still a logistics station for the US troops serving there.
Some 18,000 US troops are stationed in Kuwait, and thousands more are regularly rotated in and out of Iraq.
A parliamentary source said on Wednesday that Kuwait is asking the US to pay $500 million for fuel it supplied to the US Army after the invasion of Iraq two years ago.
US Defence Secretary Donald Rumsfeld had earlier in the week responded with a tough-worded letter to Kuwaiti demands for compensation, saying Washington had liberated the emirate from Iraqi occupation in 1991, and because it enjoys a fiscal surplus there was no need to demand the payment.
Annoyed by the harsh response, the Kuwaiti government summoned US ambassador Richard LeBaron in protest.