By Fahed Fanek
Many observers thought that the minister of finance went too far when he estimated that imported energy, petroleum and electricity will cost the country $4 billion this year.
In fact, the minister was very conservative in his prediction. The imported petroleum bill during the first six months of this year reached JD1,587 million, while imported electricity cost JD104 million, bringing the total to JD1,691 million.
Assuming that the present petroleum price remains stable during the second half of the year, as it did in the first half, the total energy bill this year will top JD3,383 million, i.e., the actual cost of energy may exceed the government’s estimates by 20 per cent, to reach 16.9 per cent of the gross domestic product.
This is by far the highest rate of its kind in the world. It is equal to three to four times the normal percentage in most countries.
We should be honest and recognise the fact, bitter as it may be, that the Jordanian economy cannot afford to set aside enough financial resources to meet this huge commitment.
The government should take some measures in order to reduce energy consumption in a substantial manner if it does not want to see the challenge of energy compete with that of public debt in posing risks to the economic and financial stability of the country.
The government knows well these facts. It actually took certain measures to deal with the issue. It decided to maintain the low prices and subsidise the difference, to enable consumers to obtain fuel items at prices below cost.
This policy encouraged more energy consumption in the form of fuel and electricity. The pricing policy is being used in the opposite direction, achieving unwanted results.
Nuclear reactors do not provide a solution, they create more problems due to high cost of building and operating, lack of sufficient water, disposal of nuclear waste, pollution of the environment, relocating people and hurting the image of the country as a tourist destination.
What is needed is a strict policy to work in two directions: reducing energy consumption by applying all technical and pricing means, and thus reducing the need to import energy; search for alternative sources of energy generation, such as the wind and the sun.
Alternative sources of clean energy are not only encouraged internationally, they are also supported financially as part of the world effort to reduce carbon emissions and use clean energy acceptable from environmental, health and economic view points.
The Jordanian desert can be transformed into an energy production site. Oil shale deserves more attention as a promising source.
In the world of today, the production efficiency is improving. Countries are producing a unit of GDP by using a diminishing amount of energy. Unfortunately, we in Jordan are going in the opposite direction. Consumed energy is growing faster than the GDP growth rate.
The economy is growing this year at the moderate rate of 2.3 per cent, while energy consumption is growing at a much higher rate than the economy. This is an unsustainable state of affairs that should not be allowed to continue.
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