Jordan King Abdullah vetoes fuel price hike

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King Abdullah parliament speech
King Abdullah delivers a speech during a session for the parliament in Amman. Photo – Ali Jareki/Reuters

Jordan’s King Abdullah has blocked a hike in the price of the low-grade fuel used by the poor as the aid-dependent kingdom struggles to cope with refugees from neighbouring Syria.

The increase in fuel prices, which sparked several scattered street protests by the government’s tribal and Islamist opponents, was the second this year under IMF-guided measures to cut subsidies and ease budget strains.

Palace officials said on Monday the king had asked Prime Minister Fayez al-Tarawneh’s government to freeze the planned 10% rise in the price of lower-grade gasoline.

On Sunday, 89 of the 120 deputies in the country’s lower house of parliament signed a petition urging the king to dismiss Tarawneh over the move, which took effect on Saturday.

The government, mindful of public fury that exploded into street clashes in the depressed south of the country after two price hikes in 1989 and 1996, has long been reluctant to raise fuel prices.

Jordan was rocked by street protests early last year which were inspired by the wave of unrest in neighbouring Egypt and Syria. The authorities expanded social spending and froze fuel prices, including gasoline.

However, the government had to raise the price of premium petrol by 20% under IMF directives last May. A month later it raised the price of lower grade gasoline used by lower-income Jordanians – the majority of the country’s seven million population – by 12.9%.

Jordanian officials say such measures show the commitment to fiscal consolidation needed to keep International Monetary Fund (IMF) support and win further aid.

Economists believe it is becoming increasingly untenable for Jordan to maintain subsidies, plus a bureaucracy whose salaries consume most of the $9.6 billion annual budget, in the absence of large inflows of foreign capital or aid.

Government officials insist the rise in gasoline prices will help Jordan meet an IMF-backed budget deficit target of around 5% of gross domestic product after grants that traditionally cover budget shortfalls.

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