Fuel price hike, bad time for consumers in Jordan
Near midnight on Tuesday, the Cabinet announced an increase in the price from JD0.62 to JD0.70 per litre
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For some motorists, the timing of the government’s Tuesday night decision to raise the price of 90-octane gasoline was “inappropriate” and the new price is way “too high”.
Near midnight on Tuesday, the Cabinet announced an increase in the price from JD0.62 to JD0.70 per litre, a few weeks after the price of a litre of the higher quality 95-octane gasoline was raised from JD0.795 to JD1. The decision was not carried in the majority of daily newspapers as it came after they went to press.
Rami Dmour, an employee at a private mining company, told The Jordan Times on Wednesday that the decision had not come as a surprise, as the government had made clear that fuel would be among the commodities that would become more expensive under its plans to address the deficit in the state budget.
However, he emphasised that the timing of the decision was “wrong” in light of the ongoing protests in the Kingdom against rising living costs and demands for economic and political reforms.
“Policy makers should have also waited until people got over the earlier decision to hike the 95-octane gas,” he suggested. Dmour, who recently bought a large-engine car, said he believed that JD0.70 per litre was too high a price, adding that he fears further hikes in the coming months.
Ramzi Tabbour, an accountant at a private firm, agreed with Dmour that while the public expected the decision, it was inappropriate. Transportation fares and food prices will automatically go up because of the decision, Tabbour said, noting that decision makers had pledged several times that its austerity programme would not have negative impacts on limited-income Jordanians.
Another motorist who was unhappy with the new decision was Mohammad Tamimi, who feared that price hikes may fuel more protests in the country.
“Decision makers got it wrong when they decided to increase the fuel price as this may affect stability, which is our greatest asset,” Tamimi noted, adding that he plans to ration his consumption of gasoline. The banker, who used to go to Irbid every weekend to see his family, said he will now travel to the northern city, some 80 kilometres from Amman, only once a month.
President of the Gas Station Owners Association (GSOA) Fahed Al Fayez said the 13 per cent price hike was beyond the association’s projections. “We expected a maximum 10 per cent rise,” he said, criticising the decision as unfair to consumers.
“It is not only the government that is suffering a financial shortfall; it is also the majority of Jordanians,” he stressed. Asked whether he expected demand for 90-octane fuel to drop, Fayez said no, indicating that daily consumption of the product is around 3,000 tonnes.
The new measure will provide the Treasury with an additional JD140 million per year if demand remains at this level, the GSOA president said. In a statement issued on Wednesday, Finance Minister Suleiman Hafez said the increase in the price of 90-octane gas reflected the reduction — not the elimination — of a subsidy on the product.
In the statement, carried by The Jordan News Agency, Petra, Hafez added that the government will reconsider fuel prices if oil prices decline on international markets.
According to Fayez, current consumption of 95-octane fuel is between 250 and 300 tonnes per day, whereas before last month’s price hike it was around 700 tonnes per day. He predicted demand on both types of gasoline to increase sharply in the coming weeks with the influx of large numbers of Arab tourists and the return of Jordanian expatriates for the summer holidays.
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