Jordanian Government suspends electricity price hike

Published March 14th, 2012 - 07:33 GMT
The extra money collected under the raised tariffs will be deducted from the electricity bills of the coming months, according to the government decision
The extra money collected under the raised tariffs will be deducted from the electricity bills of the coming months, according to the government decision

The government finalised a decision on Tuesday to suspend a previously announced rise in electricity prices amidst growing opposition amongst traders and lawmakers. In a Cabinet meeting, the Council of Ministers issued a decision to suspend new electricity tariffs announced in late January that would have raised rates by an average of 9 per cent through May 1.

Under the new decision, announced earlier this week, consumers will return to the previous electricity tariffs. The extra money collected under the raised tariffs will be deducted from the electricity bills of the coming months, according to the government decision, carried by the Jordan News Agency, Petra.

Although the decision did not clarify whether the government will maintain the previous electricity rates past May 1, official sources say the move aims to give decision makers an extended period to devise a new tariff system that raises electricity prices on “the smallest segments of society possible”. According to an energy official, who preferred to remain unnamed, the move came as a direct response to challenges to the government’s claims that the planned price hike would not affect 92 per cent of citizens and 89 per cent of commercial outlets.

The revised tariff was announced earlier this year as a bid to address the National Electric Power Company’s (NEPCO) growing budget deficit, projected to reach JD1.7 billion by the end of the year, a move that prompted a popular backlash and threats of a parliamentary motion to withhold confidence from the government.

According to the Electricity Regulatory Commission, officials devised the tariffs to alleviate the burden of ongoing cuts in Egyptian gas supplies, which cost the Kingdom JD1 billion in 2011, on the government’s projected JD1.02 billion budget deficit while impacting only “the largest consumers”. Lawmakers and traders refuted the government’s claims, insisting that the price rise would impact 80 per cent of merchants and lead to a 15 per cent rise in basic food commodities, calling for the energy minister’s resignation.

According to NEPCO, Egyptian gas supplies have yet to return since a Sinai blast earlier this month that marked the 13th attack on the Kingdom’s main energy source in a little over a year, forcing the country’s power plants onto heavy fuel reserves at a cost of $5 million per day.


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