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Iraq oil minister resigns over gas hikes

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Al-Ulum says higher prices are "not suitable to the economic situation of the people."

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Iraq
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BAGHDAD, Iraq (CNN) -- Iraqi Oil Minister Ibrahim Bahr Al-Ulum announced Monday he had resigned in protest over higher gas prices.

Ahmed Chalabi -- the controversial former exile who has had a rocky relationship with the United States since the war began -- took over as interim oil minister.

At a news conference in Baghdad, Al-Ulum said, "I kept my promise by giving my resignation and giving it to the office of the leader of the ministry in the afternoon of 28th of the last month."

His announcement came amid an uproar over the price hikes. On Sunday, some protests turned violent, leading to clashes with police. Residents set some petrol stations and the offices of at least one oil company on fire.

On December 19, Al-Ulum threatened to resign his post over price hikes, despite having initially supported the Iraqi Council of Ministers decision to increase prices for oil derivatives.

"I did initially agree to increasing the price of gasoline, but I had a different opinion about the method of executing this order," Al-Ulum told reporters at the time.

"We had agreed to donate money to 2 million Iraqi families in need. This money was meant to be distributed before the price raise."

He also said that officials had planned to gradually increase the price, not have it jump up all at once.

Al-Ulum said he asked the government to reassess the decision, and added that Prime Minister Ibrahim Al Jaafari agreed to look into the situation. He said that if the decision was not amended he would resign.

Speaking Monday, he said the new higher prices are "not suitable to the economic situation of the people which has a negative affect on their living conditions."

Chalabi, a deputy prime minister in the interim government, is head of Iraq's energy council. He took over as oil minister.

Chalabi was an Iraqi exile for decades, and ran the Iraqi National Congress, an exile group that received millions of dollars from the United States.

He fell out of favor with the Bush administration in 2004 amid allegations that his group provided Iraqi defectors with faulty information about Iraq's suspected weapons programs, which the United States used in the run-up to the war.

Chalabi faces bank fraud charges in Jordan, and U.S. officials say an investigation is under way into whether he provided Iran with top-secret information about U.S. codebreaking abilities.

Chalabi has denied the alleged fraud and alleged passing of secrets and was in Washington for talks with Bush administration officials in November.

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