Jordan Times
Tuesday, August 24, 1999
Gas price hike affects drivers' wallets the most
By Saad G. Hattar
AMMAN — Professional drivers fear the recent gasoline price hike will hit them where it most hurts —in their wallets.
“Most sectors are to be affected by the recent increase of gasoline,” said Abdel Karim Mashayekh, spokesman for the taxi drivers union. “We are prone to witness higher prices in most services as a result of this decision.”
With nearly 21,000 public vehicles, this sector is mostly affected by the hike of gasoline.
To balance the equation, the government decided to raise taxi and public service car fares by five per cent as of Sunday.
Minister of Transport Jamal Saraireh said the increase of fares covered only gasoline-fuelled cars.
But Mashayekh, along with many taxi drivers contacted by the Jordan Times, charged that the wage hike fell well below the gasoline increase which amounted to seven per cent of the old price.
Prime Minister Abdur-Ra'uf S. Rawabdeh declared on Saturday a 20 fils-increase per litre of gasoline, a measure expected to earn the treasury, along with doubling the registration and licensing fees of new vehicles, roughly JD20 million.
Rawabdeh explained that the additional funds were badly needed to cover lost revenues of nearly JD37 million, in light of a drop in customs duty on cars.
“The problem goes far beyond the hike of gasoline,” said one taxi driver. “Most operational services should be taken into account.”
Another driver argued that the income of this trade had barely outgrown ever higher expenses, even before the gasoline hike.
“Drivers already reel under high spare-part prices and mechanical charges,” he added.
Marwan Otoum said the price hike is bound to affect a wide range of consumers.
“I expect the prices to go up by ten per cent in a cross section,” he told the Jordan Times.
The gasoline hike is the second since 1989, when the government of Zeid Rifai raised the prices of oil derivatives by 20 per cent.
The spokesman for the taxi drivers union said the government adjusted the tariff rates then by increasing them 10 per cent, half of the potential losses.
In 1996, another hike of five per cent was introduced to taxi tariff, according to Mashayekh, who stressed that the increments fell short of full compensation.
Economists say that the fuel prices in Jordan are no more subsidised.
Since 1990, Jordan imports its crude oil from Iraq at concessionary prices under a U.N. exception to the crippling embargo slapped on Iraq since August 1990.
The oil bill for 1999 is estimated at $300 million in return for 4.8 million tonnes.
The deal is part of a barter agreement under which Iraq imports Jordanian goods and services, worth $295 million for the current year.