By Hani Hazaimeh

AMMAN - Police on Sunday had to intervene to maintain security and regulate the long queues of vehicles seeking a refill at gas stations as a result of a severe shortage in fuel derivatives, especially gasoline 90 and 95.

The scene of cars running out of petrol and parking by roadsides was not unfamiliar in Amman.

Bakers also expressed fears of a spillover of the problem into their sector, with some, especially small bakeries, already complaining that on Saturday they stopped work because of lack of diesel.

Economic analysts accused the government of “floundering”, blaming the “unworkable pricing mechanism” for the crisis.

The Jordan Petroleum Refinery Company (JPRC) said its teams were working round-the-clock to meet the fuel orders on time, adding that demand by gas stations grew fivefold.

According to a JPRC official, the number of orders for petrol placed with the refinery on Saturday and Sunday stood at 1,647, totalling 30,120 tonnes, compared to zero demands on Friday and 404 orders (6,910 tonnes) on Thursday.

Blaming the gas stations for the aggravation of the problem, the JPRC said owners cancelled their orders after the government announced its intention to lower prices in order to get rid of quantities in their tanks before the new price update was put into effect Saturday midnight.

The JPRC was on Sunday working at full capacity to meet the soaring demand, he said, adding that the orders are met on a first-come, first-served basis.

“Around 195 trucks, including the company's 140 oil tankers, carried a total of 4,984 tonnes of fuel derivatives by noon today [Sunday]," the official said, expecting the amount to exceed 8,000 tonnes by midnight.

The shortages surfaced after gas station owners complained of losses as a result of seven successive drops in fuel prices since August 11.

They are negotiating with authorities to come up with solutions.

According to President of the Gas Station Owners Association Fahed Fayez, a meeting with the Ministry of Energy and Mineral Resources, scheduled for yesterday, was put off till Tuesday.

He told The Jordan Times that the government is mulling a mechanism based on calculating the average daily sales of each Kingdom’s 395 petrol pumps. On the day the update is announced, whether there was a drop or an increase, each station would be getting its orders at the past month’s average prices.

The association, for its part, demanded an increase to their margin of profit, currently set at 1.5 per cent. Another solution is to link gas stations via Intranet with the JPRC, which could electronically detect the amount of stock in the stations and these supplies would be paid for according to the new price.

Bakers, in the meantime, said that the frequent drops in diesel prices have harmed the sector.

According to an agreement with the government, prices of subsidised flour are inversely proportionate to the price of diesel. Head of the Bakeries Owners Association Abdul Ilah Hamawi said that large bakeries tend to keep large stocks of diesel to sustain their operations, but when there is a drop in the price of the fuel, the price of flour automatically goes up, leading to losses.

In light of the latest drop in fuel prices, the Ministry of Industry and Trade decided to raise the price of subsidised flour from JD78.9 per tonne to JD82.5.

Small bakeries were affected by the past two days’ shortage. Hamawi said some of these had to borrow diesel from large bakeries to keep work running.

Meanwhile, experts said the “vague” fuel pricing mechanism is a reason behind the chaos witnessed in the fuel sector.

“If there was a fixed date for the update, stations would arrange their orders according to their average sales so that they run out of stocks the same day of the updates,” economist Yousef Mansour told The Jordan Times.

He also called for accelerating a plan to allow more players, other than the JPRC, to work in the fuel retail market, introducing the missing element of competition.

Analyst Tayseer Smadi, a former planning and international cooperation minister, criticised the latest government decision to announce the coming update to fuel prices after one month.

“This is a step backward. The government has instead to take steps to prepare the market to adjust to day-to-day changes in oil prices.”