‘Petrol prices may drop by around 5 per cent’

AMMAN – Prices of diesel and kerosene products are expected to witness a bigger drop than that of petrol in the next government pricing update for fuel set to be announced on Friday, an informed source said Sunday. 

According to the source, who requested to remain unnamed, diesel and kerosene prices are expected to go down by no less than 7 per cent, while petrol prices may drop by around 5 per cent. 

Currently, diesel and kerosene are priced at JD0.63 per litre, while one litre of unleaded 90-octane is sold at JD0.79 and 95-octane costs JD0.96 per litre. 

The source explained that the fuel pricing mechanism used by a special committee at the end of every month is mainly based on supply and demand of ready-to-use fuel products in the global market, and the price of the international benchmark Brent crude oil is only an indicator, not an element in the pricing equation. 

There are other fixed costs the government takes into account when lowering or increasing the prices of oil derivatives in the domestic market, the source said, citing shipment, transportation and storage costs, in addition to the commission given to gas stations. 

Although crude oil prices have plunged by around 9 per cent in international markets, this does not mean it should also go down in the domestic market, the source said. 

For example, liquefied gas witnessed a lower drop over the past weeks (2.5 per cent), while crude oil declined by nearly 9 per cent because demand on gas has been higher, he noted. 

Commenting on the expectations of local consumers, who expect fuel prices to go down by around 10 per cent in line with international oil prices, the source cited a recent month when the price of crude oil in the global market went down by 2 per cent, while the government lowered the prices for the domestic market by 5 per cent.