AMMAN — If the government
increases fuel prices in May to reflect international prices, as it announced,
inflation rates and people’s purchasing power will be negatively impacted,
energy experts say.
اضافة اعلان
Despite the international increase in fuel
price, due to the
Russian-Ukrainian war, the government has kept prices
unchanged since February, selling octane 90 at JD0.850 per liter, octane 95 at
JD1.085 per liter, and diesel and kerosene at JD0.615 piasters per liter.
Economic analyst, and oil and energy expert
Hashem Akel told
Jordan News that he expects the fuel price to increase
by 7 percent, whereas international fuel prices have increased by around 27
percent.
“If the government were to increases fuel
prices in line with international prices, it would be a drastic increase,” that
would anger people “because they will not be able to deal with or bear such an
increase”, Akel said.
He added that a liter of octane 90 gasoline could
reach JD1.6, and of octane 95 JD1.25, whereas diesel will sell for JD0.91
piasters when prices go up.
According to Akel, the government would adopt
a gradual approach to increasing fuel prices “so people could accept it and
deal with it”. The increase, however, will affect daily needs like food,
health, and education.
“It is a very critical issue,” Akel said,
adding that a drastic increase in fuel prices will lead to a higher inflation
rate, which is the main problem international economies, like the US’, face.
“The US decision to impose sanctions on
Russia had imposed unintended sanctions on all other countries, because Russia
is like the world’s gas station,” he added.
“Citizens will not be able to handle the
increase, but they are forced to do so. So we have to find solutions that can
be achieved locally,” Akel said.
He believes the government should consider
three solutions: omit the fixed tax on fuel prices, “because decreasing the tax
will allow citizens to save some money, which will lead to greater purchasing
power”; stop setting fuel price caps to create competition among fuel
distributors; cancel all fees on electric cars and encourage their use by
increasing the number of charging points in the Kingdom in a way that would use
surplus electricity.
Economist and specialist in oil and energy
affairs
Amer Shobaki told
Jordan News that he would urge the government
to postpone any rise in the prices of oil derivatives because citizens will be
burdened with additional financial obligations during Ramadan and before Eid
Al-Fitr.
He said the government should take into
consideration the modest economy, inflation, unemployment rates, and citizens’
complaints about the rise in consumer and food prices.
According to Shobaki, “a further increase
will reduce people’s purchasing power and negatively affect economic growth,
and the government’s revenues from taxes on services and goods, foodstuff, and
transportation.”
“This is dangerous and may lead to an
economic recession,” Shobaki said, adding that a drastic increase could not be
tolerated by citizens’ income, “especially since geopolitical indicators and
the fundamentals of the oil market suggest that the gasoline price will remain
at more than $100 per barrel until the end of the current year.”
“The government must think a thousand times before
gradually raising prices, and thoroughly study the size of taxes on these basic
commodities,” Shobaki said.
Read more National news
Jordan News
.jpg)
.jpg)
