Oct. 28--AMMAN -- The Kingdom's oil sector will be completely liberalised within the next five years, a senior official said on Wednesday.
In accordance with a Cabinet decision taken on Tuesday, the government will completely open the oil market by 2015, Minister of Energy and Mineral Resources and Minister of Environment Khalid Irani said at a press conference yesterday.
The decision will officially end the monopoly held by the Jordan Petroleum Refinery Company (JPRC), which had an exclusive 50-year concession from 1958-2008.
The move comes as part of the ministry's plan to overhaul the energy sector, Irani said.
"The National Energy Strategy calls for competition to enhance the quality and quantity of oil derivatives and we believe it will be reflected in the prices," Irani told The Jordan Times.
In the first phase, four companies will be granted a 25 per cent share of the market, with the JPRC retaining the remaining portion.
Prior to liberalising the market, a three- to five-year period will be used to establish pricing mechanisms and sort out logistical issues, the ministry's secretary general, Farouq Hiyari, indicated.
According to the Cabinet decision, each fuel company will be required to amass and maintain a 60-day strategic reserve.
"We need to expand the strategic reserves of refined products," Irani stressed.
As part of the move, the government will float a tender for the four companies to import fuel, which will be required to abide by national emissions standards, in line with Euro 4 specifications.
Irani added that the liberalisation process will be overseen by the Energy Regulatory Commission, a new regulatory body that will be established under the draft energy law. The law, which was formulated in 2009, is expected to go before the next Parliament for approval.
Currently, companies are obliged to purchase JPRC's production of light petroleum products, while the company is the sole supplier of heavy oil to the local market.
In a response to the Cabinet decision, JPRC's CEO Abdul Karim Alaween said the refinery "will be ready to work in a free competitive market" and underlined that it will move forward with its expansion and development plans, the Jordan News Agency, Petra, reported.
