Jordan Times
Wednesday, September 21, 2005
Jordan increases fuel
prices
By Mohammad Ghazal
AMMAN The government on Tuesday increased prices of oil derivatives by 4.8-29
per cent, effective as of today, to shore up an expected rise in the budget
deficit to around JD722 million by the end of the year.
Under the decision, taken after a Cabinet
session, gasoline prices rose by 4.8-5.4 per cent, while diesel and kerosene
went up by 22 per cent. The price of gas was hiked by 250 fils per cylinder. Jet
fuel was also increased by 23 per cent, while factory fuel oil rose by 29 per
cent.
In July, the government raised the prices of oil derivatives by 10-33 per cent
in a move to lift oil subsidies within three years. The measure earned the
government JD115 million and dropped the deficit by JD167 million, officials
said.
Officials said the deficit was envisaged at JD270 million in the 2005 budget,
but due to rising international oil prices the government was forced to raise
fuel prices for the second time.
They expected the deficit to reach JD820 million (more than $1 billion) if the
price of a barrel of oil reaches $70 by the end of the year.
The government estimated it would receive JD1.060 billion in grants in its 2005
budget mostly in the form of oil supplies from Gulf states. Only half of the
estimated grants were delivered, leaving the country in dire straits and a big
budget deficit.
To offset the impact of the new hike, the Cabinet decided on Tuesday to give a
one-time JD50 cash payment to state employees, retired civil servants and
military personnel who earn less than JD400 in monthly wages.
Other measures to ease the hike burden on citizens, including improving the
Social Safety Net for citizens will be introduced, the government said. Last
week, Prime Minister Adnan Badran told reporters and chief editors of local
dailies that the only way to deal with this dilemma is a gradual lift of
subsidies until the energy sector is fully liberalised. However, he added that
the original plan to lift subsidies once a year until full liberalisation of the
energy sector is reached by 2007 was changed to twice a year to cope with the
spiralling oil prices.