The government deserves credit for its prudent decision to freeze fuel prices during August, despite rising global oil prices and the likelihood of further increases amid escalating security tensions in the region, growing uncertainty, and heightened market volatility. 

 

 

 

The decision is particularly significant for Jordan, which imports most of its oil and petroleum-product needs, leaving it highly vulnerable to fluctuations in global prices and disruptions in supply.

 

There is no doubt that freezing fuel prices, rather than passing global price increases directly on to consumers, may have a temporary negative impact on public revenues by reducing the expected proceeds from the indirect taxes imposed at varying rates on petroleum products.

 

However, assessing the decision solely from the perspective of immediate revenue would be a narrow reading that overlooks its broader economic and social effects.

 

Energy is embedded in virtually every aspect of economic activity. Any increase in fuel prices is quickly transmitted to transportation, production, and distribution costs, before being reflected in the prices of goods and services.

 

Freezing prices therefore helps contain the upward trend in inflation that has emerged in recent months.

 

Inflation is not merely a statistical indicator; it is an enemy of the economy. It erodes household purchasing power, weakens domestic demand, raises production costs, and increases uncertainty for investors.

 

The decision also spares households from additional financial burdens, particularly low- and middle-income families, which spend a large share of their income on transportation, energy, and basic needs.

 

The impact of higher fuel prices does not stop at the petrol pump. It spreads across most goods and services, including food, transport, and everyday necessities.

 

Freezing prices can also strengthen economic and social stability, and consequently political and security stability, by reducing the living pressures associated with poverty and declining real incomes. Raising petroleum-product prices under the current circumstances would have widened the circle of poverty, pushed more vulnerable households into even greater hardship, and increased social tension.

 

Protecting citizens’ purchasing power is therefore not merely a social concern; it is a central component of safeguarding the country’s overall stability.

 

The private sector, across enterprises of all sizes, will also benefit from the decision through lower operating-cost pressures, allowing businesses to remain resilient, continue operating, and maintain profitability.

 

This is essential for protecting enterprises, preserving existing jobs, and preventing more workers from joining the ranks of the unemployed at a time when unemployment remains one of Jordan’s most serious economic and social challenges.

 

Even from the perspective of public finance, enabling economic activities to continue operating under less pressure helps sustain higher levels of production, sales, and profits. This, in turn, supports the continued flow of revenues from income tax, the general sales tax, and other fees.

 

The decision to freeze fuel prices therefore reflects a strategic approach to state management, one that balances revenue considerations with economic and social stability, rather than treating citizens and productive sectors according to a corporate logic focused solely on immediate profit.

 

A well-governed state measures the success of its decisions by their ability to protect both the economy and society.