“The amount of (974,813,000,000) dinars has been transferred to the bank account of the Kurdistan Region’s Ministry of Finance and Economy as the entitlement for the salaries of employees and pensioners of the Kurdistan Region for the month of May,” the finance ministry said in a statement.
The payment comes after the Iraqi government on Tuesday decided to resume the payment of the salaries of public sector employees in the Kurdistan Region, following nearly three months of suspension due to financial disputes with Erbil.
Salary distributions are set to begin tomorrow, according to the ministry.
Tensions between Baghdad and Erbil escalated in late May when the federal finance ministry suspended transfers, accusing the Kurdistan Regional Government (KRG) of exceeding its 12.67 percent federal budget share and failing to deliver the agreed oil volumes to Iraq’s State Oil Marketing Organization (SOMO). The freeze affected more than 1.2 million public sector employees in the Kurdistan Region.
Per the new deal, the payment will only cover the month of May, and the disbursement of salaries for the remaining months will depend on how the agreement is implemented moving forward.
On Wednesday, the KRG Council of Ministers called on Baghdad to abide by the new deal and stressed that it has “fully implemented all its obligations.”
The Erbil-Baghdad agreement also includes the resumption of KRG’s oil exports. The process has been halted since March 2023 when a Paris-based arbitration court ruled in favor of Baghdad against Ankara, saying the latter had violated the 1973 pipeline agreement by allowing Erbil to begin exporting oil independently in 2014.
Under the agreement, the KRG must export its entire oil output through SOMO, keeping 50,000 barrels daily for local use. In return, Baghdad is expected to make budget transfers and provide refined fuel if needed.
However, the KRG, the Iraqi government, and international oil companies operating in the Kurdistan Region have yet to reach a final agreement on the future of Kurdish oil exports.
