Iraq to Cut Fuel Subsidies from September

By John Lee.

Iraq's Cabinet of Ministers has approved a set of measures to reform crude oil pricing and reduce fuel subsidies, effective from 1 September 2026.

Under the approved measures:

• Crude oil purchases will be priced at either the State Oil Marketing Organization (SOMO) rate or the price stipulated in the general budget, whichever is lower, with a 30% discount to be set annually, starting 1 September 2026, with proceeds paid to the public treasury.
• Fuel subsidies will be lifted across all sectors from 1 September 2026, with the exception of key products supplied exclusively to citizens: petrol, gas oil, kerosene, and liquefied petroleum gas.
• Any subsidy granted to any sector will be deducted from the public treasury's share.
• The proposed mechanism is to be submitted to the Federal Financial Supervision Bureau for approval of a revised accounting policy to avoid future audit observations.

(Source: Prime Minister's Office)

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