Jordan’s strategic stocks play a key role in maintaining economic stability. They test the country’s ability to secure essential goods in a complex regional environment, focusing on two main areas: Food and energy. Since Jordan relies heavily on imports, the challenge is not just to have supplies available but also to manage shocks and prevent crises from affecting the population.

 

Last week, King Abdullah chaired a critical meeting at the National Centre for Security and Crisis Management. The discussion focused on three main priorities: Being prepared for any emergency, ensuring basic goods are available through secure stockpiles and supply chains, and guaranteeing sufficient energy and raw materials to stabilise prices and prevent market manipulation.

 

On the food side, Jordan is well-prepared. Wheat stock covers five to six months of consumption, rising to about nine months when including pre-contracted supplies. Barley stock lasts around eight months, while other essential food items cover three to four months. These reserves not only ensure availability but also give the country the ability to absorb sudden disruptions in global markets. Strategic stock allows authorities to release supplies when needed, prevent shortages, control sharp price spikes and reduce monopolistic practices.

 

Energy presents more challenges, especially with interruptions in gas supply. Jordan responded quickly by activating emergency plans and using alternatives like liquefied gas, diesel, and heavy fuel, despite the high cost of around 1.8 million Jordanian dinars per day. The national electricity company can use the strategic stock to maintain electricity during emergencies, helping industries stabilise production costs and preserve the competitiveness of Jordanian products.

 

According to the Ministry of Energy, petroleum derivatives last about 30 days, gasoline covers around 90 days, crude oil about 45 days, and natural gas roughly 30 days. These reserves provide a buffer against temporary supply disruptions. They also help manage prices: fuel purchased in advance delays global price increases from reaching local markets, giving decision-makers time to respond and stabilising industrial costs.

 

Government measures further strengthen resilience. Policies include multiple fuel import channels, flexible use of strategic stocks, and exemptions from some taxes and fees for electricity imports. These steps aim to protect electricity supply locally from global energy price fluctuations, a crucial factor for continuous industrial production.

 

Despite this preparedness, external challenges remain. Rising oil prices, higher shipping costs, “war insurance” fees, and disruptions in vital shipping routes, like the Strait of Hormuz, put additional pressure on the economy. Strategic stock acts as a first line of defense, preventing shortages and sudden price spikes, but it cannot completely shield the economy from global inflation during prolonged crises.

 

Jordan’s strategic reserves delay the impact of shocks and provide critical flexibility. However, they are not a permanent solution. Continuous hedging policies, diversifying energy sources (like solar energy for homes and factories), and expanding import options are essential to ensure the economy remains resilient in an unpredictable region.