‘Local consumption, rather than global oil prices, affect gov’t revenues’

8. Gas Prices Dana
(File photo: Ameer Khalifeh/Jordan News)
AMMAN — Government’s revenues are expected to decline by about JD100 million, following its decision to maintain current fuel derivative prices even as international oil prices have risen in the past few weeks, energy expert Hashem Aqel told Jordan News. اضافة اعلان

He said that the government had borne the difference in the rise in global oil prices between last November and until next March.

Aqel pointed out that maintaining fuel derivative prices at current levels has helped citizens especially in winter months, adding that following the steep rise in international oil prices and increasing fuel prices locally would have been deleterious. 

He said that the amount of money that Jordanians may have saved from their energy bill in the past months would probably be spent on other purchases that are subject to sales taxes, meaning that the government would still get the difference through sales tax revenues.

Aqel said that the government’s decision to keep fuel prices unchanged may be an opportunity to review the entire structure of imposing taxes on oil derivatives in Jordan, a controversial issue for a majority of Jordanians.

Economist and energy specialist Amer Showbaki said that there is no decline in government revenues because the volume of sale of oil derivatives has increased, and therefore tax revenues are increasing. He said government revenues will increase as the economy picks up after the opening of all sectors and the discontinuation of closures that occurred due to the pandemic.

Energy and petroleum expert Mubarak Al-Tahrawi said that government revenues will not be affected by the increase or decrease in global oil prices, but rather by the amount of consumption in the Jordanian market, adding that taxes on oil derivatives are not affected by prices because they are fixed.

Tahrawi also predicted that after the return to in-person education and after the first of March, due to the lifting of restrictions on economic activities, the Ministry of Finance’s revenues from taxes on oil derivatives will increase.

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