U.S. military fuel costs double from 2003 to 2007
By Rebekah Kebede
NEW YORK, March 20 (Reuters) - Skyrocketing crude prices have more than doubled U.S. military's global fuel spending since the start of the Iraq war in 2003 up till 2007, even as the volumes the military purchased slipped by 10 percent over the same period, the Department of Defense's energy-buying arm said.
The military spent some $12.6 billion on jet fuel, diesel and other fuels for its worldwide operations in 2007, the last period for which data is available, up from $5.2 billion in 2003, according to data released this week by the Defense Energy Support Center.
The energy bill for war in Iraq and Afghanistan last year was $1.7 billion, but no comparison was available for 2003.
Despite the surge in spending, the amount of fuel the U.S. military bought declined 9.5 percent to about 132.5 million barrels worldwide in 2007 from 145.1 million barrels in the year of the invasion, according to the data.
"(The rising oil price) makes our operations worldwide more expensive for the military services," said Jack Hooper, a spokesman for the DESC.
The increases in fuel prices have "wreaked havoc" on some Defense Department programs as officials pulled money from them to cover fuel costs for critical operations, according to a Defense Science Board report released earlier this year.
Defense Department officials were not available to comment on which programs had been impacted.
Energy analysts have said the turmoil in oil producing regions of the Middle East, including Iraq, is partly to blame for the surge in oil prices since 2003. Nobel Prize-winning economist Joseph Stiglitz said the Iraq war itself had added $5 to $10 to the price of a barrel of crude.
The average price of crude oil in 2003, the first year of the Iraq war, was roughly $32.50 a barrel, an amount that more than doubled by 2007, when the average price was around $72.50 a barrel.
By March 17, 2008, the price of oil hit a record high of $111.80 a barrel.
Soaring energy prices have also forced the Department of Defense to adjust its fuel cost estimates in the midst of a fiscal year for two years running.
The Department of Defense raised its internal benchmark fuel price by 31.6 percent just three months into the 2008 fiscal year, according to the Defense Energy Support Center. (Reporting by Rebekah Kebede; Editing by Marguerita Choy)
