AMMAN — The government is currently finalising its review of an electricity price rise which, according to energy officials, will lead up to 32 per cent increases in citizens’ monthly bills.
According to the Electricity Regulatory Commission (ERC), the government is in the final stages of its review of a proposed electricity tariff, submitted by the Ministry of Energy last week, which calls for cross-sector raises ranging between 8 to 40 per cent.
“We have finalised what we believe is a fair and just electricity tariff, and now it is up to the Cabinet to put it into force,” ERC Chief Commissioner Ahmad Hiyasat told The Jordan Times on Thursday.
The gradual price raise is based on customers’ monthly consumption, a pricing structure first introduced in a tariff unveiled by the government in January, which it later withdrew following a popular backlash.
The proposed tariff exempts households that consume less than 600 kilowatts per hour monthly from any price rise, a bracket the government claims covers some 88 per cent of citizens.
According to Hiyasat, households that consume over 1,000 kilowatts per hour monthly and heavy industries will carry the bulk of the price rise, pegged at 32 per cent and 40 per cent respectively.
The commercial sector will also carry part of the burden, according to Hiyasat, with the largest consumers to witness a price hike ranging from 25 to 40 per cent.
Despite the government’s ability to amend the proposed tariff, energy officials privately expect the government to endorse the tariff “as is” next week, with the price rises to come into effect in June.
The proposed price hike comes amid ongoing disruptions in the Kingdom’s Egyptian gas supplies, which have forced the country’s power stations onto costlier heavy oil and diesel reserves, a switch officials claim cost the country some JD1.7 billion annually.
According to the ERC, the new tariff will lead to a 10 per cent reduction in the National Electric Power Company’s (NEPCO) burgeoning budget deficit, expected to reach JD1.5 billion by the end of the year.
According to energy officials, rising international oil prices have pushed NEPCO’s electricity generation costs to some 184 fils per kilowatt-hour (kWh), more than twice the 73 fils/kWh rate at which it sells power to consumers.
Meanwhile, Egypt has increased Jordan’s gas supplies to 100 million cubic feet (mcf) per day as part of an ongoing “testing phase” following a two-month absence of the Kingdom’s main energy source.
“Although gas supplies are increasing, it is nowhere near enough to cover Jordan’s electricity generation needs,” said a Ministry of Energy official, who was not authorised to talk to the press.
Egyptian gas supplies have averaged some 80mcf over the past year, well short of the 220mcf outlined in a 12-year agreement between Cairo and Amman.
The Arab Gas Pipeline has been the target of 14 separate acts of sabotage over the last 14 months.