(Baghdad) Iraq, which has still not adopted its budget for 2022, adopted an emergency financing law on Wednesday allowing it to settle the arrears claimed by Iran to settle its debt on the gas, and ensuring food security.
Posted at 1:25 p.m.
While Iraq is entering a scorching summer where temperatures are close to 50 degrees, Baghdad wants to ensure the operation of its power plants and avoid a reduction in gas imports, often suspended by the influential Iranian neighbor.
Baghdad should have paid Tehran $1.6 billion ($1.88 billion) in arrears by early June, a 2020 sum never settled to date due to US sanctions on Iran that significantly delay payment procedures.
On Wednesday, Iraqi lawmakers passed an emergency funding law on “food security and development,” totaling 25 trillion dinars (about $21 billion).
Four trillion dinars (about $3.4 billion) will be earmarked for settling Iraq’s gas and electricity debts and buying energy from abroad. In addition, 5.5 trillion dinars (about 4.3 billion dollars) will be used to buy cereals, including a large part of wheat, on the domestic market and abroad.
The law has yet to be promulgated by the President of the Republic, Barham Saleh.
Iranian gas and electricity imports provide nearly a third of the consumption of Iraq, whose infrastructure has neither the capacity nor the maintenance necessary for the energy independence of its 41 million inhabitants, despite huge hydrocarbon reserves.
Due to unpaid arrears, Iran has sharply reduced its gas exports in recent days, further limiting electricity production and accentuating the already substantial load shedding throughout Iraq.
Iran has however “promised to restore the supply of our gas needs in the coming days”, assured Prime Minister Moustafa al-Kazimi on Tuesday.
Due to US sanctions, Baghdad cannot pay for its imports in cash: the money must be used by Tehran to buy goods from the agri-food or pharmaceutical sectors and the process is always very difficult.
The law adopted on Wednesday had to be submitted to parliamentarians urgently, because Iraq has still not adopted a budget for 2022.
Since the October 2021 legislative elections, the two poles of political Shiism – the current of Moqtada Sadr and the pro-Iran coalition of the Coordination Framework – have each claimed a majority in Parliament and the right to appoint the Prime Minister.