File photo: Iraqi lawmakers attending a parliament session in Baghdad. AFP
Oil has been a source of recurrent tension between Kurdistan's autonomous regional government and federal authorities in Baghdad. Kurdish leaders see the budget amendments as contradictory to an agreement concluded in April over oil exports.
Iraqi Kurdistan's Prime Minister Masrour Barzani said Saturday the changes amounted to "treason" and an affront to Iraqi Kurdish rights, while Nechirvan Barzani, the Iraqi Kurdistan president, said he was "deeply concerned" about the changes.
The federal government in mid-March sent the draft three-year budget to parliament, where changes were introduced to the original text.
The Kurdish regional government had for years earned billions of dollars in revenues exporting 475,000 barrels of oil daily to Turkey without the Iraqi federal government's approval.
But in March the region was forced to halt its lucrative sales following international arbitration ruling in favour of Baghdad's exclusive rights over exports.
The April deal cleared the way for resuming exports, and stipulated that Baghdad's State Oil Marketing Organization (SOMO) would manage the oil sales.
Revenues from the sales would be paid into a bank account overseen by Baghdad, and the Kurdish autonomous region would also receive a share of the federal budget, it said.
But Iraqi deputies changed the original budget text.
It now says the Kurdish region must first deliver 400,000 barrels of oil daily to the federal authorities, along with non-oil revenues, before it can receive its federal budget allocation, according to Kurdish Iraqi economist Govand Sherwani Sherwani.
The original draft, he said, had guaranteed that Kurdistan "would receive its share of the budget without condition, as a constitutional right".
Furthermore, the changes stipulate that Kurdish oil revenues would be deposited "in an account belonging to the Iraqi Finance Ministry, at the Iraqi Central Bank", instead of an international bank account as previously agreed, Sherwani said.
In a country where political agreements are concluded after endless negotiations between political parties, the objection of the Kurds is delaying a parliamentary vote on the budget.
Iraq's oil dependent economy has traditionally been plagued by budget delays, which the government's three-year proposal aimed to avoid.