UN okays Iraqi oil-for-food deal

Meanwhile, Iraq has already resumed pumping oil for export purposes and will restart sales in the international market by early next week, Iraqi Oil Minister Amir Muhammad was quoted as saying. It had stopped selling oil last month pending approval of the plan.

However, the price structure is yet to be finalised. Price is fixed every month depending on the fluctuations in the prices in the world market.Analysts expect further fall in the prices of oil in the world market which is already under pressure since Organisation of Petroleum Exporting Countries (OPEC) decided to increase their output.

The programme, which took effect in December 1996 and renewed on December four for a third 180-day period, allows Iraq to sell $ 2.4 billion worth of oil every six months to buy humanitarian supplies, but the entire operations has to be monitored by the UN.

Thirty per cent of the proceeds from the sale of oil go to the fund from which compensation is paid to the victims of Iraqi aggression on Kuwait.

Under the new plan, $ 1.3 billion will be used to address the humanitarian requirements. Of this, $ 850 million have been allocated for food and $ 200 million for medicines and other medical supplies.

The plan, divided into six parts, also includes resources and equipment for sewerage, electrical power, agriculture and education.

The Council had agreed to allow Iraq to sell limited quantity of oil following reports by independent observers and UN officials that severe shortages of food and medicines were badly affecting children, women and old people.

Last month, Russia and France had insisted the programmebe expanded allowing Iraq to sell twice the quantity of oil, but the United States blocked it after Iraq expelled some American arms inspectors which it later readmitted.

However, the Council will consider the issue of expanding the programme later this month or next month after the Secretary General submits his report on the issue.

The UN had imposed strict economic embargo on Iraq following its unilateral invasion of Kuwait in 1990.