Gas station owners at odds with gov’t over commission rate

AMMAN — Gas Stations Owners Association (GSOA) President Nahar Seidat has demanded the government to increase commission for the fuel sector by 7 fils per litre while taking into consideration the inflation ratio. 

Energy Minister Ibrahim Saif sent an official letter to Prime Minister Abdullah Ensour, asking for a 3 fils per litre increase to the stations’ commission but Ensour said the increase should be only 1 fils per litre, which “the GSOA rejected”, Seidat told The Jordan Times over the phone on Tuesday. 

“The commission must be increased by at least 7 fils per litre to meet the demands of the association, its general assembly and the sector”, Seidat said, adding that the GSOA understands the pressure of regional conditions and wants the demands to be met without having to resort to escalatory measures.

Negotiations are ongoing with the Energy Ministry to conduct a study that identifies the exact amount of a fair increase in the commission. 

Officials at the Energy Ministry were not available to comment on the issue despite several attempts by The Jordan Times. 

The current commission is 12 fils per litre, and in 2012 a decision was made to increase it to 15 fils per litre but stations were required to provide bank guarantees worth JD4,000-5,000, a bank commission and monetary insurance, according to Seidat, who added that that increase was not helpful.

The liberation of the oil derivatives market and the entry of big companies helped showcase an advanced model for gas stations, Seidat said, adding that old stations that could not cope with the new changes were negatively affected. 

Moreover, the cost to improve and update one gas station is around JD100,000 which is “a burden” to be paid by the distribution companies and station owners, the GSOA president said, noting that the development of stations is needed in order to compete in the market. 

If the commission rate is increased, there are plans to attract more Jordanian workers to increase their number compared to guest workers, he said. 

The volume of investment in the fuel sector amounts to JD700 million, JD500 million of which is in  fuel stations and the rest in gas cylinder shops, adding that the overall daily operating capital for fuel stations amounts to JD7 million and JD500,000 for gas shops.

Seidat was recently elected as president of the GSOA, whose members are around 1,200.