Jordan refinery workers call off open-ended strike

Reuters, Tuesday 13 Mar 2012

Discontent remains as the Kingdom mulls an increase in electricity prices to cover costly alternative fuel after a series of attacks on Egypt pipeline stymies its natural gas supply

Workers at Jordan Petroleum Refinery have agreed to call off an open-ended strike that was scheduled to start on Wednesday, a refinery offical said.

"Yesterday's meeting solved the problem," a refinery official told Reuters on Tuesday, adding that many of the demands made by employees over working conditions had been met.

Among workers' concerns is the prospect that they and other Jordanians would have to pay higher prices for electricity, because of a series of attacks in Egypt on the Sinai pipeline bringing natural gas to Jordan.

The government move to increase power prices to cope with soaring electricity generation costs was met by an outcry by business and industrial lobbies.

The bombings in Egypt have forced Jordan, along with other countries in the region, to seek additional supplies of gasoil, a more expensive fuel that can be used to generate power instead of gas. The refinery has been responsible for the purchases.

The large imports of gasoil, organised via monthly tenders, have helped widen Jordan's trade deficit by 21 per cent over the past year.

But Jordan has also at times been forced to make big purchases on the spot market to fill in for unexpected gaps, paying large premiums for its gasoil.

The additional expense has also led to strain on the finances of the refinery, contributing to the tension with the workforce.

In a February tender for instance, it agreed to pay a premium of nearly $36 a tonne over Middle East quotes for 350,000 tonnes of gasoil, which helped send prices rocketing in the region.

The refinery can process around 100,000 barrels of crude oil per day.

Egypt said in November it would tighten security measures along the pipeline by installing alarm devices and recruiting security patrols from Bedouin tribesmen, but attacks have continued.

Egypt's 20-year gas deal with Israel is unpopular with some Egyptians, and dozens of attacks have been carried out on the pipeline after the Egyptian president was toppled.  

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