Prices Lately: What’s Been Up And What’s Been Down

This has probably been the most talked about issue these past few days on the Jordanian street: what’s happening with prices. Speculation is running abound as economists and columnists alike have all been turning the rumor mills of uncertainty. Gas prices have been on a decline for once and the line ups at gas stations to fill up have probably never been longer. Some stations in Amman ran out of 90 and 95 gas early (or at least claimed to have), and motorists have been driving around to find a station that still has a supply. It’s times like this I thank God I bought a pickup truck. The situation got so bad yesterday that security forces were called in to ensure that stations were providing and not hoarding their supplies in an attempt to delay purchase orders from the refinery. Meanwhile, the price drops have put over a dozen of the smaller stations out of business, which may, in the context of market liberalization, lead to a healthier and more easily regulated market in the long run.

It’s strange, if not a bit funny, that this situation has become a vital dinner-table, cafe-corner and water-cooler discussion piece. Everyone is willingly sharing, with a sense of pride and relief, just how much they spent on filling up their gas tank and how much it used to cost them only a few months ago. The drops come as a major relief now that winter is upon us and kerosene/diesel prices have eased the pain of warming up a house. Another thing I’ve found interesting is the selling of heaters on the market. Everyone from Safeway to the small shops in the balad are putting out their stocks but I always found it interesting that people will constantly buy new heaters. Ammannet has a rather inquisitive piece as to what will be cheaper this year: an electric or a gas heater?

Meanwhile, inflation this past year felt unprecedented but prices have started to drop as of October and are expected to continue to decline in the coming months with the global recession looming. One of the main offsets of this scenario is the sudden import of Chinese products in to the market at discount prices, in a manner the suggests market-dumping. Chinese milk has already found its way in to the local market, which is fairly interesting given the fact that China was suffering from widespread milk contamination only a few weeks back. Here’s hoping we get the “good stuff”.

The expectation now is that cheaper fuel will mean cheaper operational costs for local producers of goods, including dairy, coupled with the other expectation that a global recession will bring in goods from countries like China and India at discount rates.

The average citizen may begin to feel a bit better in this recovery mode but it’s not the best time for Jordanian businesses. Competition is ahead of them, prices are dropping, and banks are more reluctant to loan them money. Expect a good number of small mom-and-pop shops to close down.