KRG Seeks Equal Oil Costs to Cut Petrol Prices

The Kurdistan Regional Government (KRG) is seeking to reduce the price of petrol in the Kurdistan Region from 750 to 450 Iraqi dinars per liter. This would require Baghdad to align the cost assigned to oil production in Kurdistan with Iraq's calculation, which is currently at $4 per barrel.

Kurdistan's Ministry of Natural Resources has a production cost of $16 per barrel, according to Dr. Ghazal Hostani, Director General of Contracts. She stated that if this cost were treated on the same basis as Iraq's, the ministry would have the financial room to offer the same subsidized price.

The dispute over oil production costs and crude allocations has led to a petrol shortage in the Kurdistan Region, which has affected supplies and contributed to higher prices at fuel stations. The KRG has asked Baghdad to increase the volume of crude supplied to refineries from 50,000 to 130,000 barrels per day.

The current allocation of 50,000 barrels is divided between two refineries: Lanaz and KAR. However, KAR alone has the capacity to process about 75,000 barrels per day but is operating below capacity due to insufficient crude supplies.