Erbil to rectify budget shortfalls with independent oil exports 2016 1/5/2016
Erbil to rectify budget shortfalls with independent oil exports 2016
1/5/2016 0 Comments
ERBIL, Kurdistan Region--The Kurdish government will stop delivering oil to the central government in Iraq and will instead export oil independently to make up for its budget shortfalls, said an official. "If the KRG delivers to Baghdad the agreed quantity of 550,000 barrels a day, Baghdad will not be able to pay the KRG its share of the budget -- which is about $1 billion a month. So the KRG studied the situation and decided to export oil on its own," the chairman of the KRG's finance and economic affairs Izzat Sabir Ismael told Bloomberg News. The KRG says this is a response to the freezing of its 17 percent share of Iraq's national budget by Baghdad for more almost two years. Independent oil exports would be to supply Erbil with a steady revenue. "Oil prices are low, and government revenues in 2015 were about $50 billion at best, which means half of what has been forecast," said Sabir. The payment of civil servants salary (many in the Kurdistan Region depend on income paid by the public sector) has been delayed for four months now as the KRG struggles to cope with the threat posed by Islamic State (ISIS) and make up for the slump in the price of oil. Erbil therefore hopes by further exploiting oil in their own territory in 2016 and exporting it independently that they can at least partially rectify this situation.