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The government pays on your behalf

Ala Al-Qaralah

3 min read

This is the perspective that should be considered when discussing the pricing of oil derivatives in Jordan, especially during the months that saw a rise in oil prices due to tensions and wars in the region, and the accompanying disruptions in global energy markets. The government absorbed the value of these differences by not reflecting the difference directly on the local market.

The government did not reflect the full global increase in the local price, but rather adopted a policy of gradually raising prices, culminating in their stabilization in the last two pricings, despite continued pressure on import costs. Estimates say that the differences absorbed by the treasury since the start of regional tensions and the rise in oil prices have exceeded 250 million dinars.

This equation does not stop at fuel; the government also absorbs about 5 dinars for each domestic gas cylinder, and continues to bear the burden of rising diesel costs and its impact on the bread industry by supporting flour to help keep the price of Arab bread stable, alongside other burdens related to essential sectors, including water, the cost of production, pumping, and transportation of which increases with rising energy costs.

Here, we must look at support in a different way; support is not necessarily a cash amount received by the citizen, but could be a price that has not risen, a commodity that has not reflected its full cost, or a service for which the government bears part of the cost. In all cases, there is a real bill, but the government bears part of it instead of the citizen.

Therefore, the question is not whether fuel prices will rise in the next pricing, but also how long the treasury can continue to pay these differences. Protecting the citizen from sudden shocks is important, but continuing to bear the differences means additional burdens on the public finances, especially if global oil prices remain high for a long period.

In conclusion, the government "pays on your behalf", which is true, but we must remember that it pays from the public money; that is, from the state's money which has other uses and priorities. Therefore, the citizen and consumer do not pay the full bill for rising oil at the gas station, but part of this bill is transferred to the treasury for the state to bear instead of them.

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