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To the best of my understanding, oil from Iraq is sold on the open market, with the procedes of the sale going into an account administered by the UN. The UN then buys food with funds drawn from that account, and sends the food to Iraq. The UN skims 2.2% of the account to cover administrative costs. I guess that means Iraq pays the premium in the reduced amount of food received. The point CNN surprisingly made last night was that the UN has a vested (perhaps conflicted) interest in keeping Saddam in power, because if the food for oil program is eliminated, the UN is out hundreds of mils of $ per year.