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As fuel crisis deepens, Iraq replaces oil minister with controversial US ally

BAGHDAD -- As a fuel crisis deepened in Iraq yesterday, the government replaced its oil minister with controversial Deputy Prime Minister Ahmed Chalabi, whose poor showing in the Dec. 15 elections was a setback in his recent attempt at political rehabilitation.

The oil minister, Ibrahim Bahr Uloom, was put on a mandatory, monthlong leave. He had previously threatened to resign over the government's recent decision to increase gas prices sharply, a move that has outraged motorists and sparked attacks on gas stations and fuel convoys.

Violence has escalated across Iraq since the elections, including yesterday when two US soldiers were killed, one by an improvised bomb south of Baghdad and another by small-arms fire in the western city of Fallujah. Two mortar shells struck near a bus station in the capital, killing five people and wounding 24, police at the scene said.

Threats by insurgents seizing on the unpopularity of the gasoline price increase led to a shutdown this month of the country's most productive oil refinery, in Baiji, north of Baghdad, which Assim Jihad, an oil ministry spokesman, said would cost $20 million a day until it reopened.

Meanwhile, foul winter weather has halted oil exports from the southern city of Umm Qasr, Iraq's only major seaport. Many of Iraq's largest power plants, already struggling to meet even a fraction of the country's energy demands, run on refined fuels.

''If these issues are not solved soon, the country will be facing an uncontrollable situation," Jihad said. ''Dr. Chalabi will be here for the short term, but this will need to be solved by the new government, by the Ministry of Defense and by the coalition forces."

Chalabi, whose government portfolio already includes heading the country's electrical commission and overseeing security for oil infrastructure such as refineries and pipelines, will temporarily take the reins of Iraq's only major industry. He had briefly led the oil ministry earlier this year while the current government was being assembled.

Jihad suggested that Uloom would probably resign, meaning Chalabi's appointment would last until the parties that prevailed in the recent elections form a new government.

Negotiations toward that end continued yesterday between Abdul Aziz Hakim, who heads the Supreme Council for the Islamic Revolution in Iraq, a dominant Shi'ite Muslim party, and Kurdish leaders in the northern city of Sulaymaniyah.

Also yesterday, an ally of influential Shi'ite cleric Moqtada al-Sadr, whose political followers joined the Supreme Council's election ticket, said Shi'ite parties should pursue an alliance with Iraq's Sunni Arabs, rather than Kurds.

Iraq's leaders have said no major decisions would be made while the composition of a new governing coalition was being determined.

''I don't think there will be any drastic changes," said Haidar Moussawi, an aide to Chalabi, when asked about Chalabi's intentions for his new post. ''But I will say we have seen a lot of problems facing the industry with security and weather, and the focus will be on trying to get . . . exports back to a level Iraq can do."

Once tabbed by some US officials as a future leader of Iraq, Chalabi suffered a series of setbacks after the US-led invasion, beginning when intelligence he provided to the Pentagon about Iraq's alleged weapons of mass destruction proved false. He was later accused of passing US secrets to the government of Iran. But in recent months, several US officials have praised Chalabi's technical expertise and ability to facilitate agreements among feuding factions within the government.

''He has proven himself quite capable and experienced in dealing with all aspects of Iraq's energy sector and is well-qualified for this position," a US official said yesterday, on the condition that he not be named because he was commenting on an Iraqi government decision. Based on preliminary results from the December elections, Chalabi received 8,645 votes in Baghdad, well below the threshold a top United Nations official suggested this week would be required to win a seat.

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