Fuel prices to fall 4-5% — Shobaki

A pump at an Amman gas station.(File photo: Ameer Khalifeh/Jordan News)
AMMAN — The price of fuel derivatives is expected to fall by 4 to 5 percent for the two grades of unloaded gasoline, namely 90 and 95 octane, said energy expert Amer Shobaki.اضافة اعلان

He told Jordan News that he expected the price of solar energy and kerosene prices will continue to rise to keep pace with the global prices.

“In August, the government returned the total tax imposed on the two grades of octane, which is JD0.37 for 90-octane, and JD0.57, 5 for 95-octane,” Shobaki said.

He pointed out that the government did not foresee the current and the upcoming decline in fuel prices globally and took a “hasty decision” at the time.

“Oil prices lost around 25 percent of their value in the past three months only, and oil Brent barrel which was sold at more than $110 is now sold at around $90,” he explained.

The government did not collect the total tax on solar energy yet, according to Shobaki, who noted “more price hikes on solar energy are expected until the end of 2022.”

The US Federal Reserve will increase the interest rate to 4 percent until the end of the year, which will impact the global demand on oil and slow down the international market economy to curb a hike in inflation rates.

Shobaki also stated that gold prices will decline in the coming weeks, due to the lack of liquidity as people refrain from investing in gold due to the increase in the interest rate.

He suggested that “those who intend to purchase gold should wait a bit more until a noticeable decrease takes place in the market.”

Another energy expert Hashem Aqel told Jordan News “octane gasoline price is subject to fluctuation due to the pressure on crude oil.”

“As such, there is no absolute estimation of a permanent increase or decrease in oil derivative prices”, he said.

He said that a slight decline in prices might occur by the end of September.

But he noted that “in the case of a global recession crisis, and if the Iran nuclear agreement is signed, then the fuel derivative prices will decrease due to the increased supply and decreased demand.”

“The agreement will get Iran back to the oil market with about 2.5 million barrels a day,” he explained.

On the interest rates by the Federal Reserve, he estimated a rise by 50-75 bps by the end of September, which “in the end depends on the inflation rates.” 

He disagreed with Shobaki that there will be a noticeable decrease in gold prices “as it is considered a safe investment for many”.

On the contrary, he added, “we might witness a slight increase in gold prices.”

He also said “setting price caps on Russian oil to reduce its revenues, which it uses in its war on Ukraine, is kind of an impossible decision unless China and India, the first and second consumers of oil worldwide, join the alliance, which is not possible.”

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