Minister does not rule out possibility of oil price hike
AMMAN — Minister of Energy Wael Sabri on Thursday did not rule out the possibility of increasing oil prices in Jordan if Iraq, the Kingdom's major oil supplier, decides to hike the price of oil it exports to Jordan in line with world market price.
Sabri said that Jordanian and Iraqi officials are expected to meet mid-November to review the renewal of the annual $600 million oil protocol. The minister was responding to the impact of the increase of oil prices on the world market and whether it will affect the Kingdom. Jordan imports more than 90,000 tones of crude oil every year from Iraq at a concessional rate — $5 less than the international oil prices.
Jordan pays $19 for each barrel it imports from Iraq.
Currently oil prices range from $30 to $34 per barrel on the world market. “Any decision Iraq would undertake to increase oil prices which they export to the Kingdom will bear negative consequences on us,” Sabri told the Jordan Times.
The minister said that any decision to increase the oil prices in the domestic market should come from Prime Minister Ali Abul Ragheb. Earlier this month, Abul Ragheb ruled out any increase in oil prices in Jordan before the end of this year. Government officials said that a World Bank delegation is expected to visit Jordan next year to review the oil prices the government charges.
“The decision to increase oil prices in Jordan will depend largely on the upcoming budget and the Iraqi decision,” the minister said. Meanwhile, Sabri said that a cabinet committee, headed by Deputy Prime Minister and Minister of Economic Affairs Mohammad Halaiqa, is reviewing ways to expand the Jordan Refinery, whose exclusivity will terminate in 2008.
The minister said the committee, which includes several other ministers, will discuss ways to expand the capacity of the refinery, which is the sole exporter of oil and its derivatives.
He indicated that official figures showed that the refinery will not be able to meet Jordan's needs by the year 2005.
Sabri said that Jordan needs $520 million to upgrade the capacity of the refinery. “The question now is how to get this amount,” the minister said. Sabri denied news reports that the committee is expected to discuss granting licence to local and foreign firms to import and sell oil in Jordan.
( Jordan Times )
By Tareq Ayyoub
© 2000 Mena Report (www.menareport.com)