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August 15 2022 3:18 AM ˚
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Jordan raises gasoline prices by 35 fils per liter at end of month

fuel
A pump at an Amman gas station. (File photo: Ameer Khalifeh/Jordan News)
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AMMAN — Minister of State for Media Affairs Faisal Al-Shboul reiterated Monday that there remain four more hikes to the prices of oil derivatives in the next few months.اضافة اعلان

The statement echoes the comments of Interior Minister Mazen Al-Faraya, who broke the news on the planned hikes earlier in the month, saying that increase was dictated by rising fuel prices internationally.

Energy expert Hashem Al-Aqel said that the government will not be affected by the rise in oil prices, since the tax it levies on the sale of oil derivatives will remain unchanged.

“It is the people who will be affected,” he emphasized.

“People are going through economic hardships and the rise in consumer goods and oil derivatives require the adoption of a culture of rationalization of consumption,” he suggested.

He also recommended that “people are better off using electric cars”, as a way to ease the burden of increased fuel prices.

Oil expert Amer Al-Shobaki said that the impact of the hikes on consumers, and the Jordanian economy at large, is “huge”. He explained that there are no viable alternatives for citizens, such as a reliable public transportation system.

Other reasons, he said, include the absence of salary hikes, while prices continue to climb. He said that the recent increase in commodity prices, which is officially set at 3.6 percent, does not reflect the real and significant rise in the price of consumer goods.

He said he believed that oil prices will rise with an envisaged increase in demand, coupled with the impending European embargo on Russian oil globally.

Shobaki said that the planned four hikes “reflect the government’s insistence on raising gasoline prices and the absence of alternatives, or solutions, because the tax levied from oil derivatives is considered as revenue to the state budget.”

“The situation is very worrying”, he warned. “It is expected that we will exceed four and may reach six hikes, while the actual increases may be higher than the rates announced by the government”.

Shobaki maintained that the government “does not have a plan to support low-income people, especially as we approach winter, and this is a call to restore the subsidy that was in 2014”, which made oil prices affordable to people.

Former president of the Syndicate of Fuel Fahed Al-Fayez told Jordan News that when the government decided to raise the prices of oil derivatives, the purpose was for the government to recoup the JD160165 million in lost revenues. “The plan was to restore these amounts by gradually raising the price, which began in April,” he explained.

He pointed out that when the government announced “losses” from partly subsidizing oil prices, “it wasn’t actual losses, but rather a loss of government revenues”. He maintained that 15 to 18 percent of budget revenues, or JD1.25 million, come from oil derivatives.

Fayez said the increases are “simply a burden on citizens, who will not be able to bear this complicated economic situation, especially in the current circumstances, as the government treats the citizens as a revenue fund.”

“The solution is to look for other sources because these raises will stop many activities and affect the pocketbook of the citizens, especially as we approach winter,” he said. He questioned how the local economy would be affected if the Russian war in Ukraine lasted longer than predicted.

Economist Mazen Irsheid said that gasoline is a basic substance for the consumers and the impact of the hikes is “significant”, even though some people have opted to buying electric and hybrid vehicles.

Last summer, the government slapped a 10 percent raise in customs on electric cars for the third consecutive year, “contradicting its declared stances that it supports renewable energy and seeks to reduce the burden on people”.

He said Jordan imports 93 percent of its energy needs annually, which “requires government planning, not depending on citizens”.

The price of gasoline 90, 95, and 98 octane per liter is considered the highest in the Arab world, and with the planned increases, it “will remain as such”.


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