AMMAN — Interior
Minister Mazen Al-Faraya said last week that Jordanians should get ready for
the possibility of four more fuel hikes in the coming months. He justified the
decision by saying that the government had lost JD450 million in the first
quarter of this year by keeping fuel prices fixed while oil prices were
increasing internationally.
اضافة اعلان
During his meeting with investors at Al-Hassan
Industrial City, Faraya said the government “will not be able to continue the
policy of fixing fuel prices as it did over the past three months, and that
citizens must understand this.”
Faraya’s controversial statements were widely
criticized by Jordanians from all walks of life. For the majority of Jordanians
the latest hike in fuel prices was already too much for them to bear. Fuel
prices had hit a historic level and the effect would be reflected on the prices
of basic goods and the cost of living, at a time when Jordanians were still
reeling from the effects of almost two years of the COVID-19 pandemic on the
economy.
Oil expert Amer Al-Shobaki told
Jordan News that we should expect more than four upcoming fuel price increases, in light of
the turbulent international oil and gas markets. He added that the government
is trying to make up for lost revenue resulting from keeping prices steady in
the first three months of the year.
Shobaki said that there is some ambiguity regarding
how much the government actually lost in taxes. “There is more than one figure
that was circulated by officials in the past 10 days,” he said. “One is JD173
million according to the secretary-general of the Ministry of Energy, and then
there is the JD 300 million pointed out by the assistant secretary-general of
the Ministry of Energy, in addition to the JD450 million cited by Minister
Faraya,” he added.
Shobaki admitted that the government was actually
profiting from oil derivatives sales through taxes.
But economist Mazen Irsheid said that stabilizing
oil products prices for a few months did not result in actual losses because
the government imposes fixed taxes on oil products that deliver about JD1.2
billion annually to the Treasury. “So it’s not accurate to call them losses but
rather unrealized revenue,” he added.
The solution he and other experts are calling for is
for the government to leave the energy sector and allow competition between
private companies who will import refined oil derivatives, which will relieve
the government from handling additional costs.
Such a move also reduces the cost of maintaining the
oil refinery, which is borne by the consumer. “The state should impose an
appropriate income tax to encourage private companies to enter this sector and
set price ceilings for these companies when need be,” Irsheid said.
For his part, Shobaki stressed that these hikes put
Jordanians in difficult situations especially those with modest incomes. He
said that the real pain will be felt in the coming winter season as a majority
of Jordanians depend on fuel oil for heating.
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