VZCZCXYZ0013
RR RUEHWEB

DE RUEHAM #3136/01 3241034
ZNR UUUUU ZZH
R 191034Z NOV 08
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 3849
INFO RUEHGB/AMEMBASSY BAGHDAD 6111
RUEHLB/AMEMBASSY BEIRUT 2942
RUEHEG/AMEMBASSY CAIRO 3833
RUEHRH/AMEMBASSY RIYADH 2051
RUEHTV/AMEMBASSY TEL AVIV 1404
RUEHJM/AMCONSUL JERUSALEM 5236
RHEBAAA/DEPT OF ENERGY WASHDC

UNCLAS AMMAN 003136 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR NEA/ELA, NEA/I, and EEB 
 
E.O. 12958: N/A 
TAGS: ECON ELTN EPET JO IZ
SUBJECT: Two-Day Strike by Truckers Results in Some Fuel Shortages; 
Mixed Views on Bid Process to Ship Iraqi Oil 
 
Ref:  A)  Amman 2381 
  B)  Amman 2354 
  C)  Amman 1789 
 
Sensitive but unclassified; please protect accordingly. 
Not for internet distribution or use outside the USG. 
 
¶1.  (SBU) Summary: Sixty-five Jordanian oil transportation companies 
held a two-day strike on November 13 and 14 in protest of what they 
consider to be low transportation fees paid by the Jordan Petroleum 
Refinery Company (JRPC) and an alleged unfair bidding process for 
the transport of oil from Iraq to Jordan's domestic refinery.  Abdul 
Kareem Dirabani, President of the Union of Transportation Trucks 
Owners (UTTO) representing the companies, said JRPC's administration 
had refused to negotiate on fees, but, in his view, allegations of 
corruption involving the bid for transporting Iraqi oil were 
unfounded.  JRPC reported it did not consider the strike to be a 
significant event.  The strike, which ended when JRPC's CEO met with 
UTTO and reached an undisclosed deal, initially resulted in isolated 
shortages of fuel supplies in Amman and the southern cities of Kerak 
and Tafilah.  Fuel shortages, however, persist, which most observers 
attribute to gas station owners who refused to sell existing fuel 
stocks following the November 15 decision to lower consumer fuel 
prices in accordance with market rates, the seventh decrease since 
August (Ref B).  End Summary. 
 
¶2. (U) Sixty-five Jordanian oil transportation companies began a 
two-day strike at noon on November 13 to protest what they 
considered to be low fees for the transport of oil from the port of 
Aqaba to the Jordan Petroleum Refinery Company (JRPC) in Zarqa.  The 
participants indicated during a November 9 meeting that the strike 
would take place unless JRPC consented to their demands for an 
increase in the per ton transportation rates for the 216-mile trip 
from Aqaba to Zarqa.  The group further demanded the expansion of 
eligible bidders for the contract for transportation of crude oil 
from Iraq to Jordan to allow more than just one company, current 
contractor Al-Abraj, to take part.  Following the June visit to 
Jordan of Iraqi Prime Minister Maliki, the flow of discounted oil 
from Iraq resumed, albeit at a trickle (Ref C).  Oil is trucked to 
the border and then off-loaded to Jordanian trucks for the rest of 
the trip to the refinery. 
 
¶3. (U) UTTO President Abdul Kareem Dirabani said the decision to 
strike was in direct response to JRPC's refusal to meet to discuss 
the UTTO-signed contract on oil transportation.  Dirabani explained 
UTTO signed a contract with JRPC in March 2008, which used a pre-set 
formula to calculate trucking fees based on market prices for the 
trucks' diesel fuel.  He claimed this approach caused union members 
to lose money as fees are adjusted retroactively and when world oil 
prices fell, the companies were paid based on the most recent rate. 
 
 
¶4. (SBU) Dirabani disputed union members' allegations of corruption 
regarding the deal to transport Iraqi oil from the shared border to 
the Zarqa refinery, saying the Ministry of Energy and Mineral 
Resources (MEMR) handled the bidding process for oil transportation 
with transparency.  Only one company, however, Al-Abraj, was able to 
meet MEMR's conditions -- providing JD7 million ($9.2 million) as a 
deposit guarantee -- and therefore accept the risks associated with 
transporting oil from Iraq.  Al-Abraj representatives counter that 
the bid was won "by the book" through the MEMR process.  Regardless, 
Dirabani considers the deal as insignificant, noting that, "barely 
30 oil trucks crossed the borders daily" (Ref A). 
 
¶5. (SBU) The truckers further demanded that JRPC address the issue 
of contamination of oil loaded at the Port of Aqaba.  Water often 
seeps into the oil from the sea-going transport ships and the 
truckers/transportation companies are held accountable.  As a result 
truckers are being paid only for the amount of oil that remains 
after draining the water. 
 
¶6.  (SBU) The strike, resulting in some isolated fuel shortages in 
Amman and the southern cities of Kerak and Tafilah, ended November 
15 when JRPC's CEO met with union members.  JRPC will reportedly 
adjust transportation rates, using an undisclosed formula, so that 
truckers are not financially penalized when market prices drop. 
Fuel shortages, however, persist across the country, a combination 
of JRPC delivery delays as a result of the strike and gas station 
owners who refused to sell their stocks and lose money when the GOJ 
lowered fuel prices in accordance with market rates. 
 
Visit Amman's Classified Website at: 
 
http://www.state.gov.sgov.gov/p/nea/amman/ 
 
BEECROFT