The northern oil rich city of Kirkuk has received one tenth of its budget which was already dropped to half in order to reduce 2021 budget, local official said.
Ali Hammadi, assistant of Kirkuk governor for technical affairs, said Kirkuk local administration has received only 155 billion Iraqi Dinars (155 million American Dollars USD) in 2021 both from Petrodollar and regional development budgets.
Last February, Kirkuk administration called upon Baghdad to double petrodollar allocations for Kirkuk in 2021 budget draft.
Kirkuk local officials said the allocation was 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 to 5% of total oil and non-oil revenues.
Kirkuk officials then 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 complained that Iraqi government has allocated only 2.5 percent instead of 5% of Kirkuk oil revenues for the city in 2021 draft budget.
"The federal government sent 120 billion dinars to Kirkuk governorate within the framework of the regional development budget, part of that amount was spent to bridge debts in 2019, such as debts to contractors, and the rest was spent on projects o 2020 and 2021, including rehabilitation for number of main streets, bridges, underpasses and several other projects."
Regarding the petro-dollar budget, the Kirkuk administration, according to Hammadi, received "35 billion (Iraqi) dinars (23M USD)."
The deputy governor of Kirkuk explained, "50% of the petro-dollar budget was spent on permanent projects, and the rest was spent to clean the city of waste."
Hammadi stressed that the Iraqi government intends to send an amount of 40 billion dinars during the next few days within the framework of the regional development budget for 2021.
"For the 40 billion dinars, the Ministry of Planning sent a letter to the Ministry of Finance and we are waiting for that budget to reach us," but he did not explain how it would be spent.
The oil-rich city of Kirkuk, pumps 2-3 million barrels a month generating hundreds of million Dollars for national revenues which 90% rely on oil marketing while the province suffers from proper basic public services in all sectors, in particular education and healthcare.
Kirkuk, Iraq’s second largest reserves, located 238 kilometers north of Baghdad, is an ethnically mixed province for 1,7 million Kurds, Arabs, and Turkmens. It has long been at the center of disputes between Baghdad and the Erbil.
The Iraqi parliament was intensively reviewing 2021 budget draft as the deficit was one of the highest since 2003. It has focused on reducing expenditure and booming the incomes.
In December 2020, Prime Minister Mustafa al-Kadhimi's cabinet approved a 2021 draft budget of 150 trillion Iraqi dinars, $103 billion, amid 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 was estimated at 63 trillion dinars ($43 billion),
The draft 2021 budget was 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 while oil prices has passed USD70 per barrel.
