A “shocking” decision by the Iraqi Ministry of Oil... warnings and criticism of electronic collectio

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[size=52]A “shocking” decision by the Iraqi Ministry of Oil... warnings and criticism of electronic collection at gas stations[/size]

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2023-11-23
The decision of the Iraqi Ministry of Oil to adopt electronic payment systems in all fuel selling stations and to end cash dealing as of January 1, 2024, was a shock to citizens who are not familiar with the culture of electronic payment and banking transactions, except for employees among them.[/size]
[size=45]Economists confirm that the electronic payment infrastructure is not at a level that allows switching from cash to electronic payment, suggesting that the decision will cause a fuel crisis in the country if the ministry insists on its strict implementation.[/size]
[size=45]The shocking statement[/size]
[size=45]The Iraqi Ministry of Oil announced yesterday, Wednesday, that the Petroleum Products Distribution Company will adopt electronic payment systems at all gas stations, starting from the beginning of next year.[/size]
[size=45]The Ministry explained in a statement, “In line with government directives, the Ministry of Oil decided that the Petroleum Products Distribution Company will adopt electronic payment systems at all stations, and suspend cash dealing as of January 1, 2024.”[/size]
[size=45]The company, as stated in the ministry’s statement, called on citizens to cooperate with it by adopting modern mechanisms and means in the distribution sector to serve the public interest, through the acquisition of approved electronic payment cards so that everyone can refuel according to the new mechanisms and benefit from the services provided in the distribution sector.[/size]
[size=45]A new burden[/size]
[size=45]Observers believe that the electronic collection decision will add a new burden to citizens, especially earners and taxi owners who do not have a “Master Card.”[/size]
[size=45]According to observers, they will be forced to issue cards at a cost of 10,000 dinars per card, and then fill the card with a minimum of 100,000 dinars, in addition to the refill amounts, which will lead to an increase in the cost of filling gasoline, and this will in turn be reflected in the prices of the entire market.[/size]
[size=45]They emphasized that citizens in countries around the world have the choice between electronic and cash payment, without being forced to choose a specific method.[/size]
[size=45]Negative repercussions[/size]
[size=45]In this context, economist Omar Al-Halbousi says, “This mechanism may have negative repercussions on fuel prices if it is strictly implemented, which may lead to higher fuel prices and the recovery of the black market for fuel.”[/size]
[size=45]Al-Halbousi explains, “Some people who have electronic payment cards buy fuel and sell it outside gas stations to people who do not have electronic cards, which will constitute a fuel crisis in Iraq, if the ministry insists on strict implementation of it.”[/size]
[size=45]He added, “At the same time, there is a great weakness in the electronic payment infrastructure because the stations that will use it are few, with most of the workers in these stations not applying electronic payment, in order to deduct a commission from people outside the official price.”[/size]
[size=45]He continues, “In addition, there are entire governorates that do not have electronic payment points in any of their stations, and this is borne by the Ministry of Oil along with private banks and electronic payment companies, which did not provide an excellent level of infrastructure in order to switch from cash to electronic payment, especially since most of the payment devices The email is old and not up to date.”[/size]
[size=45]The economic expert added, “In addition to this, gas station workers do not know how to properly use these devices, due to their lack of training on them, which constitutes an obstacle to implementing this measure.”[/size]
[size=45]Electronic payment culture[/size]
[size=45]He stated, “Iraq also greatly lacks a culture of electronic payment, and this is borne by the Central Bank of Iraq, private banks, and electronic payment companies that have not carried out any real activity to spread the culture of electronic payment to get rid of cash, but on the contrary.”[/size]
[size=45]Al-Halbousi explains, “There are real repulsive factors imposed by banks and electronic payment companies, starting with the difficulty of issuing these cards and the banks’ dishonesty regarding customers’ documents and their use in most cases without the knowledge of the customers, which has made customers reluctant to obtain these cards.”[/size]
[size=45]He continued, “There are also exaggerated prices for issuing the card, and the mechanism of its use is not explained to the customer, which made him stay away from electronic cards. There are also commissions deducted from every electronic payment process from the customer that costs him an amount greater than the cash payment, despite the Cabinet’s directive that the commission is not It is deducted from the client, but from the employer.”[/size]
[size=45]Al-Halbousi concluded by saying, “All of these factors make the implementation of the process of transition towards electronic payment unsuccessful. Indeed, the country will enter into a crisis unless there are pre-implementation treatments to avoid any crisis, as well as the smooth transition towards electronic payment, which the bank employees themselves are unaware of.” Using it, what about the ordinary citizen?[/size]
[size=45]Citizen interest first[/size]
[size=45]For his part, the economic expert, Abdul Rahman Al-Sheikhli, points out that “this measure was supposed to be announced a while ago, and work to educate citizens and introduce them to the benefits of using electronic payment devices, and taking the path of temptations by selling petroleum products at less than their price to those who use them.” As for releasing these devices in this forced manner, they will harm citizens and cause a scarcity of fuel.”[/size]
[size=45]Al-Sheikhly adds, “In the winter season, the citizen needs fuel continuously to operate the heaters, and whoever has an electronic payment device or electronic card will buy this quantity and sell it on the black market, so a new black market will be created other than the regular market.”[/size]
[size=45]He explains, “The ministerial program of Muhammad Shiaa Al-Sudani stipulates the use of electronic payment devices, but the Ministry of Oil is supposed to take into account the interest of the citizen first before satisfying the officials, and resort to options including supporting those who use these devices, and dealing with them in a way that encourages them and not coerces, which is completely rejected.”[/size]
[size=45]Fears of fraud[/size]
[size=45]In turn, Ali Daadoush, a researcher in economic and international affairs, confirms that “most members of society do not have banking transactions and are not familiar with the culture of electronic payment (except for employees among them).”[/size]
[size=45]Daadoush added to Shafaq News Agency, “Forcing the customer to deal with payment cards without knowing their contents exposes the customer to fraud from some souls who fish in murky waters, or similar gangs specialized in electronic theft, and there are many examples in our contemporary reality.”[/size]
[size=45]He continues, “There are also large numbers of employees who withdraw their salaries directly when they are released to the card, and this procedure is done because of their lack of confidence in the banking system, as a result of the repeated negatives, penalties, and other things that have affected a number of banks, specifically since the beginning of 2023.”[/size]
[size=45]As for the positives, Daadoush points out that they are represented by “an increase in the culture of electronic payment for the general population of society, and thus it will bring about an intellectual civilizational development that is parallel to what exists in neighboring countries at the very least, as well as in the countries of the world.”[/size]
[size=45]He believes, “This will lead to the creation of an electronic market that may extend even to sellers of vegetables and fruits and the like, and this is what is done in neighboring countries, and thus the basic and desired goal of moving towards a de-cashing society (cancellation of cash) and reducing cash dealing will be achieved, because of its benefits.” Important effects on the reality of macroeconomic activity in the country.”[/size]
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