- The government adopted a policy of gradual adjustment and price stabilization.
- The Treasury absorbed price differentials of JD224 million.
- Oil prices reached record levels, exceeding $120 per barrel.
Amman, Sept. 29 (Petra) -- The government has absorbed oil price shocks since regional tensions began, as crude reached record levels above $120 a barrel to limit the direct impact on Jordanians and economic sectors.
The government has borne a large share of the global rise in fuel costs. It has not passed the full increases on to local prices.
It provides direct support of JD1.6 million a month for liquefied petroleum gas allocated to the industrial sector. The aim is to preserve the competitiveness of national products and contain local production costs amid global market volatility.
Energy expert Hashem Aqel said the approach has prevented sudden "price shocks" that would erode purchasing power, deepen inflation and destabilize transport and production costs.
He told the Jordan News Agency (Petra): "When oil and fuel prices rise sharply worldwide, monthly decisions do not pass on the full increase. They reflect a partial share, with the remaining differences spread over time or absorbed through the general budget." Aqel said that the policy delivers relative stability in local prices and protects purchasing power and productive sectors in the short term. He added that it places cumulative burdens on the treasury.
He added that the treasury has borne cumulative price differences of JD224 million since regional tensions began because monthly pricing has not reflected actual global prices.
The head of the General Association of Petrol and Gas Distribution Station Owners, Nahar Saidat, said oil prices have risen sharply since the tensions began. Insurance costs and transport fees have tripled.
He said that the kingdom's energy system has been managed prudently. The government diversified its sources of imported oil, which secured sufficient stocks while many neighboring countries faced shortages and others rationed supplies.
Saidat said that crisis management extended to local prices, which stayed at "acceptable" levels because global prices were not fully passed on. He said the government bore the entire burden through a policy of gradual adjustment and price fixing.
He said the government fixed prices last month despite the global rise, which is still climbing this month.
Economic expert Munir Dayah said the decision to freeze fuel prices for several months continues the government's approach. He said the government has passed on global increases gradually and absorbed a large part of the price differences.
Aqel expects the cumulative price differences borne by the treasury to reach JD250 million by the end of the month.
//Petra// NQ
