Baghdad Moves to Lower Gasoline Prices in Kurdistan Region

At a Glance

A parliamentary committee is meeting with Kurdistan Region officials over high gasoline prices.
Baghdad is considering measures to supply subsidized fuel and crude oil to regional refineries.
The proposed arrangement includes finalizing the delivery of 50,000 barrels of crude oil daily.
Representatives are preparing a final memorandum outlining steps to resolve the fuel crisis.

A high-level meeting is being held in Baghdad over measures to address high gasoline prices in the Kurdistan Region and improve fuel supplies.

Key Statements and Focus Area

Federal Responsibility: The federal government is awaiting the committee’s final memorandum before beginning practical measures related to fuel supplies and reducing prices. — Harem Kamal Agha, head of the PUK bloc in the Iraqi Parliament.
50,000-Barrel Allocation: The allocation of 50,000 barrels, which had previously been discussed with Baghdad, is expected to be finalized through the ongoing talks. — Kawa Abdulqadir, parliamentary committee member.
Comprehensive Solution: Representatives will put forward a broader plan after the Kurdistan Region’s Minister of Natural Resources is hosted by the committee. The plan is intended to address the fuel issue through coordinated measures between the federal and regional sides. — Sipan Sherwani, KDP bloc representative.

Information obtained by Channel8 indicates that Baghdad is hosting the meeting today, Thursday, with the aim of reaching arrangements to address gasoline prices in the Kurdistan Region.

The parliamentary committee has invited the Kurdistan Region’s Minister of Natural Resources to discuss the allocation of 50,000 barrels of crude oil to refineries in the region. Representatives of regional political parties in Baghdad are also involved in efforts to prepare proposals aimed at reducing gasoline prices.

The discussions follow a meeting held on Wednesday between the parliamentary committee and the directors of the State Organization for Marketing of Oil and the Oil Products Company. That meeting focused on the technical aspects of supplying fuel to the region.

The process is also linked to Baghdad’s stated readiness to remove obstacles affecting the supply of gasoline to the Kurdistan Region. The parties are now working toward completing the arrangements needed to move from discussions to implementation.

FYI

The current gasoline crisis in the Kurdistan Region stems from a mix of halted independent oil exports, strained federal budget transfers, and a reliance on private sector fuel imports.

Following a March 2023 international arbitration ruling, Kurdistan Region's independent crude oil exports through Turkey were suspended, forcing the Kurdistan Regional Government (KRG) to negotiate directly with Baghdad over energy management. Without active local production flowing to regional refineries, public fuel subsidies dwindled, causing local gasoline prices to spike significantly higher than those in federal Iraq.

To alleviate the economic burden on citizens, recent bilateral negotiations have focused on reintegrating the Kurdistan Region into Iraq’s federal energy network. Under these developing framework agreements, Baghdad’s Ministry of Oil supplies a designated quota of federal crude oil to local refineries in exchange for structured regional revenue reporting.

By treating Kurdistan Region's fuel distribution as part of the nationwide sovereign supply chain, the federal government aims to deliver subsidized gasoline to local pumps, ultimately closing the price gap between the region and the rest of Iraq.