Slick liberalization

Today, I chuckled as I read Samih Ma’aitah’s piece. In it, he earnestly asks questions about how petroleum products are priced, the cost of the crude oil that we buy and the relationship between the two. I don’t know if he is being naïve or being clever.

I have pointed out previously that the numbers that the government feeds us on this issue don’t make sense. It is almost as if the numbers are put out to confuse rather than to explain.

The government has recently liberated the price of oil products, but it has not liberated the oil market. This means that they retain the monopoly on importing and marketing oil, set the price they feel is appropriate and, thus far, don’t allow the private sector share in the bounty. Nobody is suggesting that government control of prices is meant to protect consumers.

When the issue of the expiration of the 50 year contract with the Jordan Petroleum Refining Company showed up a couple of years ago, the initial statements suggested that the market will be opened and competition between different companies will result. Ziad Manaseer opened a chain of high end modern gas stations in anticipation of this. Since then, the contract has expired and the government has dragged its feet on issuing legislation and regulations to allow for real liberalization to occur. I guess 50 years wasn’t enough time to think about this and decide what to do next.

Today, a report in Al Ghad says that a group of industrialists want to set up a company to import and distribute oil products, because obviously feel that they can get a better deal this way than buying the oil from the government. One investor says that he hopes that the government will encourage this step and take the necessary steps to create the proposed company. His statement suggests that he probably realizes that the government is not interested in any competition in the energy market, all the statements supporting a market economy not withstanding.