Jordan: Energy officials insist new electricity pricing accurate

Published March 4th, 2012 - 01:17 GMT
The price hike came as a bid for citizens to carry part of the burden of rising electricity generation costs due to ongoing cuts in Egyptian gas supplies
The price hike came as a bid for citizens to carry part of the burden of rising electricity generation costs due to ongoing cuts in Egyptian gas supplies

Jordanian energy officials defended on Saturday claims that a limited segment of society will feel a recent hike in electricity prices amidst accusations from activists and MPs that authorities have misled the public. The Electricity Regulatory Commission (ERC) stood by its claims that 92 per cent of households and 89 per cent of traders are exempted from a recent 9 per cent rise in electricity prices, stressing that officials designed the new tariff system so that excess consumers carry the bulk of the increase.

“These figures are accurate, up-to-date and reflect our concerns for average consumers,” said ERC Chief Commissioner Ahmed Hiyasat. Hiyasat stressed that according to ERC statistics, the majority of Jordanian households consume an average of 300-400 kilowatt hours (kWh) monthly, well below the 600kWh ceiling the commission set in its gradually increasing tariff.

The commission attributed the higher-than-average bill some citizens received for the month of February to the seasonal increase in consumption during winter months, which according to the ERC chief reaches up to 700kWh per household. “The statistics we relied upon were an annual average, and we are certain that a majority of citizens will not see rises in their monthly bills over the year,” Hiyasat said.

Under the new pricing system, consumers who use 600kWh or less of electricity per month are to be charged the same rates of 72 fils for households and 113 fils for commercial outlets per kWh that were in effect previously while those who consume more electricity will pay gradually higher rates, rising to 548 fils per kWh. Activists and parliamentarians raised doubts over the accuracy of the figures quoted in the new tariff, accusing the ERC and the ministry of “misleading” the general public.

The Jordan Chamber of Trade has rejected the ERC’s claims that 89 per cent of traders consume less than 1,200kWh per month, claiming that some 80 per cent of commercial outlets face increases of up to 100 per cent under the new pricing system. Traders have threatened a general strike in protest of the move, demanding officials to adjust tariff rates they claim will lead to a 15 per cent increase in the prices of basic goods and services.

“The government must know the truth. This price rise will affect the vast majority of traders and in turn affect the vast majority of citizens,” Jordan Chamber of Trade’s president, Nael Kabariti, told The Jordan Times. Activists from the so-called popular movements have also criticised the tariff system, claiming that the ERC relied on outdated data collected before appliances such as electrical heaters became common household items across the country, urging citizens to refuse to pay their monthly bills.

In a heated Lower House session last week, deputies called for a motion to withhold confidence from Minister of Energy and Mineral Resources Qutaiba Abu Qura over the “dubious” figures quoted by the ERC, forwarding the issue to the Lower House energy committee for review.

In response to the resistance over the revised tariffs, the Cabinet agreed last week to revisit the mechanisms used in devising the pricing structure. The price hike came as a bid for citizens to carry part of the burden of rising electricity generation costs due to ongoing cuts in Egyptian gas supplies and increased reliance on heavy fuel oil and diesel, which is projected to cost Jordan up to an additional JD1.7 billion this year.

According to energy officials, Egyptian gas supplies have yet to resume since a January blast in the Sinai that marked the 12th act of sabotage on Jordan’s main energy source in less than a year. Should Egyptian gas supplies resume to 2011 levels — some 100 million cubic feet per day — officials still project a JD1 billion deficit for the National Electric Power Company (NEPCO).

The new electricity tariff, announced by the government in January, aims to shed some $1 billion of NEPCO’s ballooning budget deficit over a six-year period. Activists have vowed a rise in protests if the government refuses to reverse its decision, which they claim places additional burdens on citizens already facing economic hardships.

Jordanian energy officials defended on Saturday claims that a limited segment of society will feel a recent hike in electricity prices amidst accusations from activists and MPs that authorities have misled the public. The Electricity Regulatory Commission (ERC) stood by its claims that 92 per cent of households and 89 per cent of traders are exempted from a recent 9 per cent rise in electricity prices, stressing that officials designed the new tariff system so that excess consumers carry the bulk of the increase.

“These figures are accurate, up-to-date and reflect our concerns for average consumers,” said ERC Chief Commissioner Ahmed Hiyasat. Hiyasat stressed that according to ERC statistics, the majority of Jordanian households consume an average of 300-400 kilowatt hours (kWh) monthly, well below the 600kWh ceiling the commission set in its gradually increasing tariff.

The commission attributed the higher-than-average bill some citizens received for the month of February to the seasonal increase in consumption during winter months, which according to the ERC chief reaches up to 700kWh per household. “The statistics we relied upon were an annual average, and we are certain that a majority of citizens will not see rises in their monthly bills over the year,” Hiyasat said.

Under the new pricing system, consumers who use 600kWh or less of electricity per month are to be charged the same rates of 72 fils for households and 113 fils for commercial outlets per kWh that were in effect previously while those who consume more electricity will pay gradually higher rates, rising to 548 fils per kWh.

Activists and parliamentarians raised doubts over the accuracy of the figures quoted in the new tariff, accusing the ERC and the ministry of “misleading” the general public. The Jordan Chamber of Trade has rejected the ERC’s claims that 89 per cent of traders consume less than 1,200kWh per month, claiming that some 80 per cent of commercial outlets face increases of up to 100 per cent under the new pricing system.

Traders have threatened a general strike in protest of the move, demanding officials to adjust tariff rates they claim will lead to a 15 per cent increase in the prices of basic goods and services. “The government must know the truth. This price rise will affect the vast majority of traders and in turn affect the vast majority of citizens,” Jordan Chamber of Trade’s president, Nael Kabariti, told The Jordan Times.

Activists from the so-called popular movements have also criticised the tariff system, claiming that the ERC relied on outdated data collected before appliances such as electrical heaters became common household items across the country, urging citizens to refuse to pay their monthly bills.

In a heated Lower House session last week, deputies called for a motion to withhold confidence from Minister of Energy and Mineral Resources Qutaiba Abu Qura over the “dubious” figures quoted by the ERC, forwarding the issue to the Lower House energy committee for review. In response to the resistance over the revised tariffs, the Cabinet agreed last week to revisit the mechanisms used in devising the pricing structure.

The price hike came as a bid for citizens to carry part of the burden of rising electricity generation costs due to ongoing cuts in Egyptian gas supplies and increased reliance on heavy fuel oil and diesel, which is projected to cost Jordan up to an additional JD1.7 billion this year.

According to energy officials, Egyptian gas supplies have yet to resume since a January blast in the Sinai that marked the 12th act of sabotage on Jordan’s main energy source in less than a year. Should Egyptian gas supplies resume to 2011 levels — some 100 million cubic feet per day — officials still project a JD1 billion deficit for the National Electric Power Company (NEPCO).

The new electricity tariff, announced by the government in January, aims to shed some $1 billion of NEPCO’s ballooning budget deficit over a six-year period. Activists have vowed a rise in protests if the government refuses to reverse its decision, which they claim places additional burdens on citizens already facing economic hardships.


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