![handle is hein.crs/crsajwq0001 and id is 1 raw text is: Order Code RS22923
July 23, 2008
Department of Defense Fuel Costs in Iraq
Anthony Andrews
Specialist in Energy and Energy Infrastructure Policy
Resources, Science, and Industry Division
Moshe Schwartz
Analyst in Defense Acquisition Policy
Foreign Affairs, Defense, and Trade Division
Summary
Since the invasion of Iraq in 2003, the average price of fuels purchased for military
operations in Iraq has steadily increased. The disparity between the higher price of fuel
supplied to the United States Central Command compared to Iraq's civilian population
has been a point of contention. Several factors contribute to the disparity, including the
different types of fuel used by the military compared to Iraqi civilians, the Iraqi
government's price subsidies, and the level pricing that the DOD's Defense Logistics
Agency charges for military customers around the world. The Iraqi government has
been pressured to reduce its fuel subsidy and black market fuel prices remain higher than
the official subsidized price.
Background
The Defense Energy Support Center (DESC), the primary agency responsible for
procuring DOD's ground and air transportation fuels, buys bulk energy commodities and
resells the fuel to various military customers - with a price markup to cover its cost
of operation (e.g. storage, transportation, and maintenance).' In order to deliver fuel as
cost effectively as possible, the DESC will often provide its overseas customers with
energy purchased from regional suppliers. However, the DESC generally charges all of
its customers worldwide a uniform price. For example, a military unit in Iraq pays the
same price for jet fuel (JP-8) as a military unit stationed in most other parts of the world.2
Fuels purchased by the DESC include jet, diesel, motor and aviation gasoline. The DESC
also arranges contracts for direct purchase of fuels at commercial airports and contracts
1 DESC falls under the overall command of the Defense Logistics Agency.
2 For a complete listing of prices the DESC charges customers for fuel worldwide, see
[http://www.desc.dla.mil/DCM/Files/FY2008StandardPrices_07012008.pdf]. Last visited July
8, 2008.](ViewImageLocal?handle=hein.crs/crsajwq0001&div=1&collection=&method=preview&ext=.png&size=3)
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