Energy affairs expert Hashem Akl expected stabilization of the prices of petroleum derivatives locally, which comes in light of the Jordanian market continuing to benefit from the support provided by the government during the past months, indicating that local prices are still lower than the levels reflected by international prices.
Akl explained, in a statement to Al-Rai, that the decline witnessed in Brent crude prices in global markets is not directly or immediately reflected in the prices of oil derivatives, indicating
The production, refining and distribution cycle usually requires a period ranging between two and four weeks before its impact on retail prices appears.
He added that refineries always maintain strategic stocks of crude oil and derivatives, a large portion of which was purchased when global prices were at high levels, which makes these quantities marketed according to their actual cost before products manufactured from cheaper crude reach the markets.
He pointed out that the process of refining crude oil takes time, and that the gasoline currently offered at gas stations is mostly produced from oil shipments that were purchased weeks ago at prices higher than the currently prevailing prices, which explains the delayed decline in prices for the consumer.
Akl explained that the supply chains, which include refineries, storage warehouses, and means of transportation, contain stocks that must be disposed of first before any decline in crude oil prices is reflected in the final selling prices.
He stressed that the real standard on which the competent authorities rely when reviewing fuel prices is the average monthly prices of crude oil and derivatives in global markets, and not daily or temporary movements in prices, stressing that this approach ensures that prices are calculated in a more stable and fair manner.
Akl concluded by stressing that any sustainable decline in global oil prices will gradually have an impact on the prices of petroleum derivatives locally, according to the approved pricing mechanism and after completing the cycle of production, distribution and disposal of current stocks.
