Speaking on Monday, Ibrahim Bahr al-Uloum said Iraq's crude exports had been 1.44 billion barrels a day for June. He said Iraq earned about $2.5 billion from oil sales abroad last month.

But the minister said the country, which lacks sufficient refining capabilities, is spending $300 million to import refined oil products to face fuel shortages.

"During July, Iraq imported 13 million litres (3.43 million gallons) of gasoline daily to meet the increasing demand and the oil ministry is planning to increase the local gasoline production to 13 million litres (3.43 million gallons) a day" by the end of August, Bahr al-Uloum said.

Queues

Lines at petrol stations in Baghdad sometimes stretch for kilometres, forcing drivers to wait for hours before reaching the pumps.

The fuel crisis was caused by hundreds of thousands of cars that flooded into the country, when Iraq's governmental system went idle after the fall of Saddam Hussein. The ongoing smuggling of cheaper fuel to neighbouring countries compounds the problem.

"During July, Iraq imported 13 million litres (3.43 million gallons) of gasoline daily to meet the increasing demand". 

Muhammad Bahr al-Uloum,
Iraq Oil Minister

Also, many Iraqis use petrol to run generators during the country's frequent electricity outages, especially in the scorching summer.

"Last month, the consumption of gasoline has increased in Baghdad with average of two million litres because of the electricity cut-offs," the minister said.

Tender

The Oil Ministry has issued a tender to build a new $1 billion refinery south of Baghdad with a capacity of 140,000 barrel a day, he said.


A second $400 million tender was issued to build a refinery near Sulaimaniyah in the Kurdish area of northern Iraq with a capacity of 70,000 barrels a day, he added.

Bahr al-Uloum expected that his country's oil production would rise to 3.5 million barrels a day over the next two years.