AMMAN, 12 July 2005 — The Jordanian government has raised fuel prices between 10 percent and 33 percent as part of a plan designed to end subsidization of energy products over a span of three years after three Arab countries ended their oil donations to Jordan, according to an official statement.
Surging crude prices on the world market that threatened an unprecedented expansion in the country’s budget deficit also prompted the Jordanian Cabinet to adopt an austerity package that provided, among other things, for a 20 percent reduction in the government’s expenses.
To alleviate the burden of the measures on low-income brackets, the government also decided small increments in salaries and moved the minimum wage upward.
“The government is seeking to adopt a transparent pricing policy of fuel products based on world oil prices, the cancellation of subsidies over a span of three years and allowing competition in local energy market,” the Cabinet said in a statement on Saturday.
Deputy Prime Minister Marwan Muasher warned earlier that if the government failed to take such measures the public budget deficit would reach an “unprecedented magnitude” of $1.34 billion this year, which is much higher than the 3 per cent level as a ratio of the gross domestic product (GDP) that is allowed by the International Monetary Fund (IMF).
Meanwhile, Jordanian Prime Minister Adnan Badran yesterday instructed Cabinet ministers and top-ranking officials to trade in their government-issued gas-guzzling vehicles for more fuel-efficient cars as part of efforts to cut on government spending, Petra news agency said. “A team headed by Finance Minister Adel Qudaa will conduct the necessary studies to list the number of cars owned by the various government institutions, without exception, in order to reorganize the governmental transport sector,” Badran told Petra. — With input from agencies