U.S. military is feeling the gouge of fuel costs

About half the fuel used by the U.S. in Iraq is covered by subsidies from Kuwait.

WASHINGTON (AP) — Think you’re being gouged by Big Oil? U.S. troops in Iraq are paying almost as much as Americans back home, despite burning fuel at staggering rates in a war to stabilize a country known for its oil reserves.

Military units pay an average of $3.23 a gallon for gasoline, diesel and jet fuel, some $88 a day per service member in Iraq, according to an Associated Press review and interviews with defense officials. A penny or two increase in the price of fuel can add millions of dollars to U.S. costs.

Critics in Congress are fuming. The U.S., they say, is getting suckered as the cost of the war exceeds half a trillion dollars — $10.3 billion a month, according to the Congressional Research Service.

Some lawmakers say oil-rich allies in the Middle East should be doing more to subsidize fuel costs because of the stake they have in a secure Iraq. Others point to Iraq’s own burgeoning surplus as crude oil prices top $100 a barrel. Baghdad subsidies let Iraqis pay only about $1.36 a gallon.

The U.S. military, through its Defense Energy Support Center, buys fuel on the open market, paying from $1.99 a gallon to as much as $5.30 a gallon under contracts with private and government-owned oil companies. The center then sets a fixed rate for troops, currently $3.51 a gallon for diesel, $3.15 for gasoline, $3.04 for jet fuel and $13.61 for avgas, a high-octane fuel used mostly in unmanned aerial vehicles.

Kuwait does grant substantial subsidies, but they cover only about half the fuel used by the U.S. in Iraq.

Overall, the military consumes about 1.2 million barrels, or more than 50 million gallons of fuel, each month in Iraq at an average $127.68 a barrel. That works out to about $153 million a month.

The surge in demand can be attributed in part to the military’s expanding aviation fleet, including helicopters, and its reliance on planes to shuttle cargo and troops.

between the U.S. and Iraq. Vehicles, too, are more heavily armored and require more energy to run. Another major contributor is the widespread use of generators to cool troops.

In the meantime, other lawmakers say they want to see the high costs of the war defrayed by having Iraq dipping into its own oil revenues, which are projected to be substantial. Independent auditors estimate that Iraq is headed this year toward a massive surplus because of as much as $60 billion in oil revenues — a consequence of increased production paired with the sharp rise in prices.

“It’s totally unacceptable to me that we are spending tens of billions of dollars on rebuilding Iraq while they are putting tens of billions of dollars in banks around the world from oil revenues,” said Sen. Carl Levin, D-Mich., chairman of the Armed Services Committee. “It doesn’t compute as far as I’m concerned.”