The Council of Ministers said the Finance Ministry was “obliged to stop making payments” to the Kurdistan Regional Government (KRG), read a letter to the country’s Finance Minister Fouad Hussein dated April 16.
The reports said KRG’s failure to share oil with the Baghdad government since at least October last year was behind the new decision.
According to the letter, the KRG is obliged to deliver all of its revenues from the export of at least 250,000 barrels per day (bpd) of oil to the central government in Baghdad, and then it can receive its share of the budget put at 12.5 percent.
Iraq is one of OPEC’s top five oil exporters. Disputes over energy resources have been a long-running feature of Iraqi politics since the semi-autonomous region began officially exporting crude oil to world markets through Turkey in 2009.
The latest dispute could affect the efforts of prime minister-designate Mustafa al-Kadhimi, who is seen as close to the Kurds, to form a government.
The Arab country’s parliament will hold a vote of confidence on Kadhimi’s government on Tuesday.