BAGHDAD, Oct 21 (AFP) – Pressed for time, Ahmad Hussein refuses to spend hours queuing for petrol at one of Baghdad’s teeming gas stations so he takes his car to a street vendor where it costs six times as much to fill up.

“Have you ever seen anything like this in a country that is floating on a sea of oil?” the 60-year-old businessman demanded as he stood on the roadside watching a scruffy boy pour petrol into his tank from a plastic container — a scene that is commonplace across the capital.

“It would cost 3,000 dinars (2.1 dollars, 1.7 euros) to fill my car at a petrol station, but it would also cost three hours of my time so that is why I choose to pay an extra 17,000 dinars and buy off the street,” he said.

Iraq sits atop one of the world’s largest oil reserves, but fears among the public of a fuel shortage due to pipeline sabotage, kidnappings of lorry drivers who import gas from Turkey and a general surge in demand have triggered huge queues at petrol stations in Baghdad and elsewhere.

Assem Jihad, a spokesman for the oil ministry, insists that such fears are unfounded as the country has plenty of oil in stock to compensate for any drop in imports or production due to the near-daily attacks.

He said the main problems are a surge in the number of cars since the US-lead invasion and insufficient gas stations, coupled with the many street vendors who crowd existing petrol pumps to buy cheap fuel, which they flog for a profit.

Iraq has a sort of oil welfare system, selling fuel at a much lower price than it costs to produce or import, said Jihad, nothing that this was a hangover from the Saddam Hussein era.

“Oil prices were supplemented before the war and we had to continue the same system,” he said, agreeing that the fact petrol costs less than bottled water encourages the street vendors and oil smugglers.

“I think it is a temporary measure, however, as we hope people’s salaries will improve once life becomes more stable,” he told AFP.

For now, the Iraqi government spends 2.4 billion dollars a year to supply regular oil at 20 dinars a litre and better quality oil at 50 dinars.

Despite its vast oil resources, Iraq still imports 40 percent of its fuel as the country’s own war-scarred oil industry struggles to recover, Jihad said, noting that it costs 65 dinars a litre to import, while the price of home-grown fuel is more than 20 dinars.

On a side street in central Baghdad about 20 metres (yards) away from a typically crowded gas station, Mohamed Walid poured the last drops of oil from his fuel tank into a waiting Mercedes and prepared to join the line for legal petrol.

The 20-year-old was unable to find a good job when he graduated from university earlier this year so he became a self-employed taxi driver.

“It was hard work, especially in the hot weather, and I did not earn much so about five months ago I decided that instead of driving around looking for customers I would just sell the petrol in my fuel tank,” Walid told AFP.

“It was easy, I made a nice profit and have been doing it ever since.”

Business is also booming at Baghdad’s 160-plus petrol stations, about half of which are privately owned or rented while the rest belong to the government.

“Before the war we sold about 70,000 litres of gas per day but now the figure is about 110,000,” said Mustapha Radhi Jaafa, 35, who rents a petrol station from the government in the centre of Baghdad.

“The queues here are not caused by a lack of petrol, we have plenty, it is because there are so many cars and not enough pumps,” he said, indicating to a long line of vehicles waiting to use one of only four battered petrol pumps.

“We have applied for planning permission to build more and are waiting back for a response,” said Jaafa.

Unable to say how many gas stations are in the whole country, Jihad said the government knew there was a shortage and was encouraging petrol-station owners to expand by erecting new pumps and building more stations.