UNITED NATIONS -- Russia has called for a change in the price-setting mechanism for Iraqi oil to save the Iraqi population from a humanitarian disaster, IRNA reported.

First deputy of Russia's permanent representative to the United Nations Gennady Gatilov told ITAR-TASS that the UN Sanctions Committee on Iraq discussed the critical situation on financing under the oil for food program at a special session on Monday.

The United Nations has allowed Iraq under the program to export its oil to finance basic social and economic needs of the Iraqi people.

Selling oil under the oil for food program has become the only means for survival of ordinary Iraqis under harsh conditions as a result of the comprehensive economic embargo.

According to the press release, the price-setting mechanism that was imposed on the UN Sanctions Committee ten months ago provides for the retroactive setting of prices for Iraqi oil exports which is often followed by inadequate assessment of market conditions. As a result, it said, "Iraqi oil has become less competitive and has lost its attractiveness for buyers. That, in turn, has led to an unprecedented fall in Iraqi oil exports. Iraq has lost $4.4 billion on the UN program since December 2001."

Gatilov said that most members of the UN Sanctions Committee are very concerned with the situation and agree that it should be rectified.

However, U.S. and British representatives claim that the current price formation mechanism helps block illegal revenues which Iraq earns on its oil contracts.