KRG asks Baghdad for 140,000 barrels a day to cut fuel to 450 dinars

ERBIL — The Kurdistan Regional Government has asked Baghdad for 140,000 barrels of crude a day, nearly three times its current allocation, so it can sell petrol at 450 dinars a litre — the subsidised price in the rest of Iraq.

The 50,000 barrels a day allocated for domestic consumption do not meet the Region’s needs, the Ministry of Natural Resources said in a letter dated Sept. 2. Its first proposal is for Baghdad to allocate 140,000 barrels a day, from fields in the Region or elsewhere, for processing at regional refineries. Alternatively the federal Oil Ministry could supply refined products equivalent to that volume, with the KRG surrendering its 50,000 barrels to Baghdad. In either case the federal government should cover actual production and transport costs on arrangements comparable to those used elsewhere in Iraq, the ministry said, to allow the lower price.

Baghdad turned down a far smaller request last week. The Oil Ministry refused an additional 15,000 barrels a day, citing strategic reserves at their minimum critical level and disruption to supply chains during peak summer demand.

Drivers in the Region pay considerably more than elsewhere in Iraq. Subsidised petrol sells at 750 dinars a litre through designated stations, two thirds above the federal price, while commercial regular reached about 1,750 dinars by late August, improved grade 2,000 and super 2,200 — commercial regular being nearly four times the federal subsidised rate. Officials have blamed reduced crude deliveries to local refineries.

The subsidised allocation covers only part of what drivers use. The monitoring organisation Stop said in August that an arrangement providing 40 litres every 11 days met about 20% of daily need, leaving the rest to be bought commercially. Sulaymaniyah expanded subsidised distribution from 10 stations to 13 in mid-August, though drivers at some were still waiting for deliveries, several telling 964media they had hoped for petrol at 450 dinars and had not yet obtained even the 750-dinar supply.

Acting Natural Resources Minister Kamal Mohammed said on Aug. 29 that the Region could match the federal price if Baghdad applied the same refining-cost arrangements to its refineries, and that officials had discussed supplies with the federal Oil Ministry and parliament’s Oil and Gas Committee on Aug. 26 and 27.