Deputy Prime Minister for Energy, Hussain al-Shahristani said on Monday issuing an order to stop processing benzene substance to Kurdistan region.
The denial came after sources in the Iraqi Oil Ministry said on 21 this month that the oil minister instructed to stop providing the Kurdistan region of Iraq textured gasoline from refineries ministry.
The ministry gave no reasons for the decision, but deep differences are between Baghdad and Arbil on oil contracts signed by the Government of the Territory and the federal government says it is illegal.
The region stopped its oil exports early last month to protest the non-payment of dues to Baghdad's oil-producing companies, which has exacerbated the crisis.
A brief clarification issued by Shahristani Office said that "some considered in the previous days news that al-Shahristani deputy issued a decree suspending processing of benzene for the province of Kurdistan."
"We confirm that the Deputy Prime Minister for Energy did not issue an order to do so."
According to the clarification al-Shahristani said in this regard that "there must be distributed oil derivatives produced in all refineries to all the Iraqi people in the provinces as per the population."
The oil is considered one of the most outstanding issues between the two sides since a long time to the disputed areas and other issues.
But the region has announced plans for a few days ago on its quest to build a pipeline to export oil from the region to the Turkish port of Ceyhan on the first phase to be completed by next October.