Kirkuk administration calls upon Baghdad to double petrodollar allocations for Kirkuk in 2021 budget draft.
The northern oil rich city officials state the allocation is reduced from one trillion Iraqi Dinars, about 690 million Dollars, to half a trillion IQD.
The petrodollar allocation was introduced in 2013 provincial law providing a USD1 per oil barrel for oil producing cities later changed 5% of total oil and non-oil revenues.
Kirkuk officials approached Iraqi ministries of finance, oil and the financial audit body arguing that the data and the figures they have about oil exports shows the budget should be double. They complain that Iraqi government has allocated only 2.5 percent instead of 5% of Kirkuk oil revenues for the city in 2021 draft budget.
"Allocation of only 0.5 trillion Dinars for oil producing cities is insufficient compared to the last years when it was 1 billion," Ali Hammadi, assistant of Kirkuk governor for technical issues, told Kirkuk now on Wednesday.
"We are exporting plenty of oil but the allocations in return are not enough."
Baghdad has reviewed Kirkuk appeal and admitted that figures are correct. "They have pledged to make changes but we have come to know through our representatives that no changes were made," Hamadi added.
The Iraqi parliament is intensively reviewing 2021 budget draft as the deficit is one of the highest since 2003. It aims at reducing expenditure and booming the incomes.
In December 2020, Kadhimi's cabinet approved a 2021 draft budget of 150 trillion Iraqi dinars, $103 billion, while its facing an economic and financial crisis following sharp drop in crude oil prices due to Covid-19 pandemic and low demand on oil in the international markets.
The budget deficit is estimated at 63 trillion dinars ($43 billion),
The draft 2021 budget is based on a world oil price of $42 a barrel and expected oil exports of 3.25 million barrels per day (bpd), including 250,000 bpd from the Kurdistan region.
Kirkuk local officials say though 390,000 bpd are exported, no allocations were received in 2020 from Baghdad.
Iraq ranks as the fourth-largest oil reserves and 95% depends on oil revenues to fund its budget.
Kirkuk oil price is counted for less than oil of other cities, that's why Kirkuk petrodollar allocation is deducted to half, Hamadi concluded. The local budget will be split into two halves, one for current projects and the second half for new projects, he added.
"I cannot tell if Kirkuk oil exports will be boosted in 2021 but I know the federal government depends on Basra oil fields for its high quality and higher revenues."