Washington: We support Iraq’s economic reform agenda, updating the budget and enhancing transparency
The United States affirmed, today, Thursday, its commitment to supporting the economic reform agenda in Iraq, including updating the budget and enhancing transparency.
“I was pleased to meet with Finance Minister Taif Sami Mohammed,” said US Ambassador to Baghdad Alina Romanowski. “Economic diplomacy is a fundamental pillar of the comprehensive US-Iraq partnership.”
She added, "The US government is committed to supporting Iraq's economic reform agenda, including updating the budget and enhancing transparency." link
Petroleum Products: The Percentage Of Imports Of Derivatives Decreased To 50 Percent
10/16/2024 Mawazine News - Economy The Oil Products Distribution Company confirmed on Wednesday that the government's plans have contributed to reducing the percentage of oil derivatives imports to 50%, indicating the date for ending the import file completely.
The Director General of the Oil Products Distribution Company, Hussein Talib, said: "The state was spending approximately $4.5 billion annually on importing products such as gasoline, gas oil and kerosene, and this spending is gradually decreasing with the continuation of projects aimed at achieving self-sufficiency."
He added: "Last year witnessed intensive follow-up to complete the stalled projects in the Ministry of Oil within the ministry's policy and the government program of the current government, as the ministry has set a program within a time plan to complete these projects."
He pointed out that "the most important project completed at the end of 2023 is the Karbala Refinery Project, which is considered a major source of local products, as it refines approximately 140,000 barrels of crude oil per day, with products that conform to global marketing specifications, including Super 95 octane gasoline, gas oil, kerosene and all other products."
He continued: "Operating the Karbala refinery and completing the refining projects in the northern region has reduced the import of petroleum derivatives, and ended the import of gas oil and kerosene, and reduced the import of improved gasoline from 15 million liters to 7 million liters per day, or 50%."
The video provides updates on Iraq’s economic developments, including the launch of an electronic platform for government tenders and efforts to restore confidence in the Iraqi dinar.
Highlights
🌧️ Northwest Weather: Rain welcomed after a long summer.
🖥️ Electronic Platform: Iraq launches a unified electronic platform for government tenders.
🚚 TI Agreement: Iraq’s accession to the TI agreement boosts international transport.
💰 Investment Surge: $3.5 billion in industrial investments announced.
🌍 Opening for Business: Iraq invites Arab and international investors to participate.
🏥 Development Projects: Major projects underway to enhance economic stability and confidence in the dinar.
Key Insights
🌦️ Weather Reflection: The welcoming rain symbolizes a refreshing change, paralleling hopeful economic developments in Iraq.
📊 Digital Transformation: The launch of the electronic platform signifies Iraq’s commitment to modernizing its procurement processes, promoting efficiency and transparency.
🚛 International Trade Integration: The TI agreement positions Iraq as a strategic transit point, enhancing its role in regional trade networks.
💸 Investment Opportunities: The substantial investment figures indicate growing confidence in Iraq’s economic potential and a pivot towards industrialization.
🌐 Global Engagement: Iraq’s open invitation to foreign investors reflects a shift towards a more open economy, essential for sustainable growth.
🏗️ Infrastructure Development: Ongoing projects signal a revitalization of urban areas, aimed at enhancing quality of life and boosting local economies.
The Trial Period For Raising The Prices Of Improved Gasoline Has Ended, And The Amount Of Revenues Is “Absent”
2024-10-17 By Sotaliraq The Iraqi government seems to be hesitant about the public outrage if it reveals the results of raising the prices of “improved gasoline,” especially since the pilot plan ended more than a month ago, which indicates that there are “hidden obstacles” behind the issue, according to observers.
On March 26, 2024, the Council of Ministers voted in a session chaired by Mohammed Shia al-Sudani to increase the price of improved gasoline from 650 dinars per liter to 850 dinars per liter, and premium gasoline from 1,000 dinars to 1,250 dinars per liter, starting from May 1 for a period of 3 months, after which the situation will be re-evaluated.
According to expert estimates, Iraq lost approximately 3 trillion Iraqi dinars on importing improved gasoline (which is the value of government support for improved gasoline) during 2023, stressing that these numbers have been the same for years.
The government has not yet received the evidence,
and Iraqis have strongly criticized the decision to increase fuel prices, considering that this step “is sufficient to raise the prices of all materials in the markets.”
Speaking of numbers, the Oil Products Distribution Company said (July 16, 2024) that it sold about 977 million liters of gasoline (improved, regular, and super) during the month of June of this year, without disclosing the financial returns from these numbers.
In this regard, economic expert Nabil Jabbar Al-Tamimi believes that “Iraq’s imports of petroleum derivatives have increased over the past four years, as a result of the increase in consumption and the growing demand for fuel (high-octane improved) that local refineries do not provide.”
Al-Tamimi says that “annual fuel imports have reached about $3 billion, which is a large number and unreasonable for a country considered one of the largest oil producers to import gasoline at these numbers.”
The latest government move came months ago, according to Al-Tamimi, as a bold step to raise the prices of some petroleum derivatives by 20-30%, stressing that “this step was accompanied by the government’s opening of the Karbala refinery, and also the return of production lines in the Baiji refinery.”
This year, the Iraqi government reopened the northern refinery in Baiji in Salah al-Din Governorate after rehabilitating it, following its closure for more than 10 years. It also announced at the end of last year the opening of the Karbala oil refinery with a production capacity of 140,000 barrels per day, including “improved gasoline.”
Al-Tamimi added, “These refineries were able to cover a large percentage of imports, which amounted to 15 million liters per day,” adding, “Such a step may contribute at the end of the year to saving large amounts of money that go to imports, provided that the government makes reforms to the laws of public companies, including oil refining and distribution companies, to increase the treasury’s share of these revenues that came as a result of government steps to establish new refineries and open production lines, in addition to setting a new price for oil derivatives.”
A few days ago, the Ministry of Oil issued a new statement about “improved gasoline,” confirming that Iraq will achieve self-sufficiency in improved gasoline next year, while confirming that it has achieved self-sufficiency in gas oil and kerosene products.
The decision to raise gasoline prices will continue for a long time.
According to Nabil Al-Marsoumi, an economics professor in Basra, the cost of importing improved gasoline in 2022 is 1,700 dinars per liter, while the cost of importing regular gasoline is 900 dinars per liter, indicating that the state is losing money on all types of gasoline.
In contrast, Mustafa Hantoush, an economic researcher, says, “The government is currently unable to restore the price of improved gasoline to what it was before, except after exports stabilize at the new Baiji and Karbala refineries.”
According to Hantoush, Iraq is still heavily dependent on importing improved gasoline, as local production cannot meet the large and growing need in the Iraqi market.
Hantoush continues, saying, “The Iraqi citizen is the one most affected by the decision, given that raising the price of fuel always leads to raising the prices of all food and non-food items in the markets in general.”
Regarding the possibility of raising prices again, Hantoush expects that “the government is not currently considering such a step,” stressing that “the current prices of both improved and regular gasoline will remain like this for a long time.”
According to readings by economic experts, the government has been providing support of up to 20% of the value of improved and super gasoline over the past years, which has placed a burden on the financial budget.
Iraq consumes between 27 million and 31 million liters of gasoline per day, while production is about 50% of the market's need, according to experts.
Iraq has also imported gasoline and gas since 2003 until now at a cost of about 70 billion US dollars, and it also imported 26 million liters of gas oil per month. LINK
