(MENAFN - Jordan Times) Industry and Trade Minister Shabib Ammari on Tuesday said the government was working to fight misuse of subsidies of basic commodities and to ensure that the subsidies reach the deserved beneficiaries.
One bakery was recently fined JD140,000 for violations related to reselling subsidised flour, the minister said during a meeting with members of the Economic and Social Council.
Ammari told the meeting, which tackled challenges facing the national economy, that the cost of wheat and barley subsidies alone stands at around JD200 million annually.
The minister said the government is keen to fix "pricing deformities", taking the example of electric power tariffs. He said prior to the recent price adjustments, the cost of one kilowatt of electricity was around 18-19.5 piaster while it was sold for around 7.5 piaster.
All these measures, he continued, are intended to control a widening budget deficit, which he expected to reach around JD1.4 billion at the end of the year.
The minister said a main reason for the widening deficit is the rising costs of producing electricity, mainly due to disruptions in Egyptian gas supplies to Jordan. The pipeline that supplies Egyptian gas to Jordan was sabotaged in the Sinai Peninsula for the 15th time earlier this week.
The minister went on to say that each cooking gas cylinder is sold to citizens at JD6.5 while its real cost is JD13.5, with the difference shouldered by the state Treasury.
Ammari said the government is trying to come up with a mechanism to present subsidies to those who deserve them in order to help reduce current economic and price deformities, including malpractices by bakeries and fuel stations which attempt to sell subsidised items to non-beneficiaries.
Such a mechanism should also stop smuggling of subsidised items to neighbouring countries, he noted.
At the meeting, the minister also emphasised the importance of the private sector's role in propelling the economy and creating jobs, saying the government's role should be that of guidance and motivation.
He also tackled the governorates' fund which seeks to stimulate setting up productive economic projects in various parts of Jordan, pointing out that the fund is based on the partnership between the private sector and the local communities.