Reuters reports on Sunday that the cut in Baghdad's allocation of fuel to Iraqi Kurdistan is related to the admission last month that the region is has been exporting petroleum products through Iran.
We reported at the weekend that the cut was in response to the new gas agreement between the Kurdistan Regional Government (KRG) and the German company RWE, which Baghdad regards as illegal.
The decision to cut supplies to the semi-autonomous Kurdish Regional Government was ordered by Oil Minister Hussain al-Shahristani, Oil Ministry documents obtained by Reuters showed.
"Based on instructions from the oil minister, it was decided to cut the allocation of kerosene and diesel fuel sent to provinces in the Kurdish region by 50 percent until further notice," one document said.
Shahristani has said any exports of crude oil would be illegal because the law only allows the State Oil Marketing Organisation (SOMO) to sell crude abroad. But he has also complained about the resale of refined products because Iraq does not produce enough to be self-sufficient and has to import.
Kurdish officials condemned the decision to restrict kerosene and diesel supplies to their region, and said they would make every effort to ensure fuel prices did not rise.
"The decision to cut fuel supplies is unjust and we will do our best to stop any negative implications," Serwan Abu Bakir, a senior official at the Kurdish natural resources ministry, told Reuters on Sunday.
Tensions between central government in Baghdad and the KRG have been increasing in recent months.