Jordan ponders higher energy rates in lieu of Egyptian gas suspension

The Jordanian government has announced plans to raise the prices of electricity and petroleum products after it finishes a study of them.

The step reflects Jordan's desire to stop subsidizing petroleum products due to a stifling economic crisis in the country. It also comes in response to the suspension of gas imports from Egypt.

Jordanian news agency Petra quoted the country's energy minister as saying that raising the prices of gas has become a necessity to make up for the losses of the electricity sector, which are estimated at US$1.4 billion in 2011 and are expected to climb further to $2.1 billion by the end of 2012.

Petra added that the cost of generating electricity this year is expected to reach $3.6 billion, while revenues are projected to total $1.5 billion.

The halt on Egyptian gas exports has had a negative impact on electricity generation in Jordan. While Jordan imported 300 million cubic feet of gas in 2009 and 220 million cubic feet in 2010, exports plunged to 78 million cubic feet in 2011.

Al Jazeera cited Jordanian officials as saying that the Jordanian energy minister is in Cairo to negotiate Egyptian gas supplies.

The natural gas pipeline that supplies Jordan and Israel with natural gas has been hit by 14 explosions since January 2011.

This week, Egypt suddenly terminated a deal to sell natural gas to Israel, although leaders in both countries have been quick to stress it was a business rather than a political issue.

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