Iraqi Finance Ministry Begins Disbursement of May Salaries to Kurdistan Region

PUKMEDIA

Stacks of Iraqi dinars.

The Iraqi Federal Ministry of Finance announced on Tuesday, 22 July 2025, the commencement of salary disbursements to public sector employees in the Kurdistan Region for the month of May after the Kurdistan Regional Government (KRG) transferred 120 billion dinars from its non-oil revenues of May to the Iraqi Federal Government.

In a statement, the Ministry said the payments are being made in accordance with Cabinet Resolution No. 550, adopted during an emergency session held on Thursday, 17 July 2025. The resolution outlines the terms under which the KRG would deliver oil to the State Oil Marketing Organisation (SOMO), and mandates the continued transfer of produced quantities in line with the federal budget law.

The Ministry confirmed it had received an initial sum of 120 billion Iraqi dinars in non-oil revenues from the KRG, and noted that all provisions of the resolution had been fulfilled by the relevant authorities.

The Federal Ministry of Finance reiterated its commitment to meeting its legal and constitutional responsibilities towards the Kurdistan Region, provided that the KRG continues to adhere to the federal budget law, the decisions of the Federal Supreme Court, and the latest Cabinet resolution.

Public employees in the Kurdistan Region have now gone without salaries for over 70 days despite a recent agreement reached between the Erbil and Baghdad governments over salary payments by Baghdad. Although Baghdad has decided to send the May salaries to the Kurdistan Region, June and July salaries' fate remains uncertain, deepening concerns over the welfare of thousands of civil servants in the Region.

On 17 July 2025, the Iraqi Cabinet published details of a recent agreement with the KRG, stipulating that the Kurdistan Region must deliver 230,000 barrels of oil per day to Iraq’s State Oil Marketing Organisation (SOMO), with the federal government agreeing to pay the KRG $16 per barrel for production costs.

According to the agreement, the KRG reportedly has a production capacity of 280,000 barrels per day—50,000 of which are used domestically—a recent assessment by the Iraqi Ministry of Oil found that drone attacks on regional oil fields have reduced actual production to just 81,000 barrels per day. This leaves only 30,000 barrels available for export, far below the agreed quantity and raising concerns over future implementation of the deal.

Another complication relates to the agreement's requirement that oil be delivered to SOMO and approved before salary transfers can proceed. With oil exports from the Kurdistan Region still suspended since March 2023 and unresolved debts to international oil companies, full implementation of the agreement remains uncertain in the near term.



PUKMEDIA