UPDATE 1-Iraq inflation quickens to 5.3 pct in Jan -cenbank

* Tariff hike on electricity bills affects inflation

* Iraq has crippling power shortages

(Adds details)

BAGHDAD, March 1 (Reuters) - Iraq's core annual inflation accelerated to 5.3 percent in January versus 3.3 percent in December due to higher electricity bills, a central bank official said on Tuesday.

Iraqis began receiving electricity bills containing 100 percent tariff increases last October following a government decision aimed at encouraging consumers to economise and help tackle the country's crippling power shortages.

The price doubled from 10 to 20 Iraqi dinars per kilowatt/hour for the first 1,000 KWH, or to the equivalent of less than $0.02.

However, a wave of protests across the region has encouraged Iraqis to protest over poor basic services and the Electricity Ministry last month moved to appease citizens by saying they would receive their first 1,000 kilowatt-hours of power for free each month.

Mudher Kasim, a senior advisor at the central bank, told Reuters core annual inflation for January would have been at 3.7 percent if the tariff had not been implemented.

"It was mostly affected by the new electricity tariff," he said.

The inflation rate is calculated by the COSIT statistics agency.

Iraq's economy, struggling to pull out of years of sectarian carnage that followed the 2003 U.S.-led invasion, is dominated by oil, which accounts for more than 95 percent of revenues. The bank defines core inflation as excluding expenditure on fuel. (Reporting by Aseel Kami; Editing by Serena Chaudhry/Ruth Pitchford)