ERBIL, Kurdistan Region – The Kurdistan Regional Government (KRG) is stepping up its crackdown on illegal oil refineries. Under orders from Prime Minister Nechirvan Barzani, equipment at these operations will be impounded to ensure they can’t start up again.
Some 200 million dinars ($168,000) has been allocated by the government for the removal of equipment from the illegal refineries, Sami Jalal, an official from the KRG committee tasked with the job, confirmed to Rudaw on April 21.
“For the same purpose, Erbil municipality provided three parcels of land to store the remnants of these facilities,” Jalal added.
The Kurdistan Region has been plagued by unregulated oil refineries that damage the environment but are considered a necessary evil since they help provide electricity, which the Region suffers from chronic shortages of. The government has grappled for years with how to resolve the problem and instituted the current measures after public complaints about damage to their fields, water supplies, and health.
Last October, a government council gave authorities 60 days to shut down an estimated 200 illegal oil refineries that are toxic to the environment. Barzani, in his decree on Sunday, threw his support behind the move, ordering the closure of all illegal oil operations.
Jalal said that they have identified 169 operations across Duhok, Erbil, and Sulaimani provinces with equipment that will need to be seized.
Provincial authorities have reported mixed results in their campaign to snuff out these refineries. Duhok shut 30 of 37 illegal operations; Erbil has closed 40 of the 104 refineries they were instructed to confront; and Sulaimani has shut down 14 of an estimated 40 illegal facilities, as of reports on April 19.
A Sulaimani official said that progress was slow because influential players were behind the oil businesses. "Ordinary people" can't establish a refinery, said Sulaimani Provincial Council member Rekawt Zaki.
A businessman who owns two of these refineries in Duhok province claimed the KRG isn’t serious about closing their operations. The government needs at least some of them to stay open, he told Rudaw TV’s Top Story programme on March 7, speaking anonymously.
His refineries process 17,290 barrels of oil per day, he said.
These illegal operations produce diesel that is used to run the private generators people across the Region depend on every day when the national grid cuts out.
Today, a barrel of gasoline for these private generators is selling for 100,000 dinars ($84), said a source within the oil and gas sector. He expects this price will go up as a direct result of the prime minister's order. The price of electricity will consequently spike as well, he claimed.
According to the same source in the oil and gas sector, the illegal refineries purchase their crude from Erbil’s markets, which obtains it from oilfields in Kirkuk, the Kurdistan Region, Qayyara, and a small quantity from northern Syria.
The government’s position is that it’s too soon to know how the market will react. “Since the decision is new, the implications are not felt yet,” Qaraman Mawlood told Rudaw on April 21. He leads the Erbil governorate’s department for private generators.
He predicted that there will be little impact on diesel prices since the national power generation has improved recently. Prices may still fluctuate, however, since some people have “exploited the so-called free market, tampering with prices the way they wish,” he asserted.
Groundwater supplies and soil are contaminated by the unregulated refineries, harming the health of crops, animals, bees, and villagers.
The Kurdistan Regional Government (KRG) is in the middle of a week-long campaign to promote protection of the environment.