End to Jordan Electricity Subsidies is Inevitable

Jordanian Prime Minister Abdullah Ensour told the Lower House’s Financial Committee that the government must eliminate electricity subsidies in order to reduce the budget deficit as quickly as possible.

For more on Jordan’s energy woes, see:

Telling the representatives that, “I need your help in this,” Ensour indicated that Jordan was slated to spend over JD1.3 billion (USD1.8 billion) on electricity subsidies this year, representing over 10% of all government spending for the year.

The cost of electrical generation in Jordan has skyrocketed since the Arab Spring.  Repeated attacks on the natural gas pipeline from Egypt have forced Jordan to seek out alternative, more expensive sources of fuel.  Because the price of energy is subsidized in the Kingdom, nearly the entire burden of the increased cost has fallen on the government, which has faced widespread protests every time it has attempted to raise electricity tariffs.

Ensour recalled that, due to the instability of the flow of natural gas, the Egyptian government has requested to reduce the amount it is obligated to export to Jordan by about 30%.  “I told Egyptian Prime Minister Hisham Qandil that this is a red line,” he said.

In light of the increased energy costs, Jordan has been working on numerous alternative energy projects, including renewable and nuclear energy.  However, it will be several years before any of these projects come on line, leaving the country in the lurch.

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