Tuesday, September 11, 2007

Trying to get the numbers straight

Today I read in Al Ghad a report on our oil imports for the first seven months of 2007. It is based on a department of statistics press release. It seems that we imported 633 million dinars worth of crude oil during this period. Now we are constantly told that we import about 100,000 barrels of oil per day. So, in 7 months we should have imported 21 million barrels. It is a simple calculation to figure out that each barrel cost a little more than 30 dinars (43 dollars).

Now, we have recently been through a carefully staged play in which we were told that the sky will fall in because world oil prices are over 70 dollars per barrel, and that our budget was based on an assumption that world prices would be 60 dollars this year. We were also told that we need to set aside 200 million dinars per year to cover this shortfall.

So, we are buying crude from Saudi Arabia for 43 dollars per barrel, and we made a deal with the Iraqis to buy oil at an 18 dollars discount (at the assumption that it is 70 dollars for prime crude, working out to 52 dollars per barrel). The prices are based on the assumption that the cost is 60 dollars, but since the WORLD PRICE is 70 dollars, we are losing 200 million dinars a year, despite the fact that we are not paying the world price. I hope that all of that is clear.

I have to go now. I have a headache.


At 5:52 PM, Blogger Mohanned said...

Me too, I have to go :)

At 3:15 AM, Anonymous Anonymous said...

Thanks for the confusion.
I still don't understand the wisdom behind the gov't raising customs on small cars & dropping them on large cars 2 years ago, so i have a lot of catching up to do on getting my head around Jordanian budgetary policy.

At 9:23 AM, Blogger Khalaf said...

Salamat ya Mohanned.

Imad, the government says that they make money on gasoline, but lose money on diesel and kerosene. So, larger cars spend more gas, making more money for the government. There is also pressure from the US so that their cars become competitive with more fuel efficient European and Japanese cars.

At 1:56 AM, Blogger Unknown said...

if you read this post, would you please publish it in some newspaper? I really would like an answer from the government for these confusing numbers.


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