The government is weighing options ranging from restricting the number of vehicles on the Kingdom’s roads to timed blackouts in order to confront what officials are calling an emerging “fuel crisis”.
According to government officials, Amman has hosted a series of roundtable discussions in recent weeks in order to vet options to trim some JD2.2 billion in energy subsidies set to push the budget deficit to a record JD1.2 billion.
“One of this government’s top priorities is reducing the national fuel bill and reducing fuel consumption, and we are placing every option on the table,” Minister of State for Media Affairs and Communications Samih Maaytah told The Jordan Times.
According to government sources, one of the current favoured options is “alternate driving days”, a system under which authorities would restrict the Kingdom’s roads to cars carrying licence plates ending in even or odd numbers on alternate days.
Officials say the government is leaning towards the proposal due to the country’s previous experience in the system in 1991, when the first Gulf War led to a cut in the country’s oil supplies from Iraq.
In addition to reducing fuel demand, Ministry of Finance officials claim the proposal aims to encourage car-pooling in the country and reduce the number of passenger-less vehicles on the Kingdom’s roads.
“After several studies it was decided that this is a cost-effective, painless way to cut back on fuel consumption right away,” said a government source present at meetings to address the issue, who requested anonymity.
Another pillar of the government’s proposed strategy to cut back on fuel consumption is reducing electricity use, starting with public utilities and street lighting, according to Finance Minister Suleiman Hafez.
Under a current proposal, Amman would reduce the number of active streetlights by half among major routes while completely blacking out roads that feature little evening traffic.
Electricity cutbacks would then be extended to public institutions, where the government would restrict the number of hours of lighting and other power consuming activities.
“We cannot talk about solutions to the energy crisis without talking about reducing consumption,” Minister of Energy and Mineral Resources Alaa Batayneh told The Jordan Times in a recent interview.
“If we focus on energy and fuel conservation, we can save up to 20 per cent of what we are currently spending,” he said.
Should the two proposals fail to curb rising fuel subsidies, however, sources say the government is prepared to pursue a more controversial, if not effective alternative: pre-planned regional blackouts.
Energy officials say they have provided the government with several “worst-case scenario” formulas, under which electricity would be cut to various neighbourhoods across the country for as long as three hours a day in order to sustain electricity generation.
“The government views scheduled outages as an option of last resort, but it may be our last option left,” said the Cabinet source.
Planned power outages may quickly become a reality in Jordan if officials fail to rein in growing fuel subsidies, warns the National Electric Power Company (NEPCO), whose JD2.6 billion budget deficit is threatening its ability to sustain power generation “beyond next week”.
“At the end of the day we are borrowing in order to purchase diesel and heavy fuel oil to produce electricity, and we have reached the point of no return,” warned NEPCO Chairman Malek Kabariti.
Despite new electricity tariffs set in June that raised rates as high as 150 per cent, the government-backed firm continues to sell electricity to consumers at an average of 72 fils per kilowatt-hour (kWh), nearly one-third of its 189/kWh generation costs.
The push to cut back on fuel consumption comes amid ongoing disruptions in Egyptian gas supplies, which as recently as 2010 served as Jordan’s main energy source, and rising international oil prices.
After providing an average of 40 million cubic feet (mcf) of natural gas per day, well short of the 240mcf outlined in an agreement between Amman and Cairo in 2004, Egypt suspended pumping entirely this month in order to address a recent rise in local demand.
Although Cairo agreed in principle earlier this month to resume pumping to the Kingdom, officials express doubt that supplies will return close to pre-2011 levels, when the source provided 80 per cent of the country’s electricity generation needs.
Officials say the latest disruption in Egyptian gas has sparked a “national energy crisis”, with the Cabinet set to unveil its fuel-conservation strategy later this month.
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