Jordan Times
Sunday, April 4, 2004
Gov't raises fuel prices
By Khalid Dalal
Minister of Finance Mohammad Abu Hammour told The Jordan Times that raising fuel prices is designed to control the deficit and pour JD60 million into the treasury per year. Last week, the Lower House approved an increase on sales tax from 13 to 16 per cent.
Under the new measures, the price of a gas cylinder increased from JD3 to JD3.25, a litre of regular petrol from 300 fils to 330 fils, a litre of first-grade petrol (super) from 400 fils to 435 fils, a litre of unleaded petrol from 450 fils to 470 fils, and a litre of kerosene and diesel from 130 fils to 135 fils.
Fuel used to generate electricity and for industrial purposes rose respectively from JD70 to JD75 and from JD82 to JD88 per tonne.
A tonne of asphalt was increased from JD64.5 to JD80. The international price for asphalt stands at JD115 per tonne.
The prices of fuel used for Royal Jordanian planes increased from 150 to 160 fils per litre and from 180 to 200 fils for foreign aircraft.
Abu Hammour, who noted that the government is still spending JD70 million a year to subsidise oil derivatives, said the salaries of civil servants and military personnel have been raised as of April 1 to help citizens cope with the hikes.
Those who earn JD200 a month received an additional JD10, while others who get less than JD300 obtained extra JD5.
“The government hopes that such a salary increase will enable limited-income citizens to deal with the burdens of fuel price hikes,” Minister of State and Government Spokesperson Asma Khader told a press conference yesterday, according to the Jordan News Agency, Petra.
Economist Henry Azzam said fuel price increase was expected because Jordan's import of Iraqi oil supplies at preferential prices stopped after the US invasion of the neighbouring country. The war imposed a higher energy bill on the Kingdom, which needs 5.5 tonnes of crude oil a year.
Azzam added that “things got complicated” for Jordan because international oil prices rapidly increased in the past few weeks and jumped from an average of $24-$26 to $32-$34 per barrel.
Although the decision was “unpopular,” the government “had to do it” for mere financial reasons, according to economist Fahed Fanek.
Fanek suggested that oil prices should be floated and directly linked to the international market.
“This way, the government will not be forced to add more costs due to the global market's fluctuations,” he said.
Meanwhile, the government is expected to announce today an increase on charges of public transportation as a result of yesterday's decision, according to a Ministry of Transport official.
“Increasing fuel prices will have a negative impact on citizens' daily life because the prices of several commodities as well as water and electricity are expected to be increased,” said Fathallah Emrani, vice president of General Federation for Labour Unions.