Ammon News - By Ali al-Rawashdah in Amman/ Al Shorfa

Jordanians are increasingly turning to hybrid cars, due in part to new government tax incentives.

Ministry of Finance data shows that 1,090 hybrid cars entered the domestic market in the second half of 2012, compared to 100 cars during the same period in 2011.

A total of 2,662 hybrid cars cleared Jordanian customs last year, compared to 558 in 2011.

Despite the relatively high price of these vehicles in Jordan, Bassila Abdullah, a 38-year-old nurse, believes the long term operational costs compensate for the initial acquisition price.

"It is advantageous for me to drive an eco-friendly vehicle with relatively low maintenance costs and low fuel consumption in light of the large increase in gasoline and diesel prices in the kingdom," Abdullah told Al-Shorfa.

Hybrid cars remain more expensive than regular cars, despite new government tax incentives.

In June, the government reduced tax on small-engine hybrid cars from 55% to 25% and banned the import of cars more than five years old, said Minister of Finance Suleiman Hafez.

The decision, which included an additional 12.5% tax reduction on hybrids for Jordanians replacing cars older than 10 years, was designed to lower the cost in replacing old cars' parts and reduce fuel consumption.

Government data shows more than 1,400 Jordanians took advantage of the tax incentive to replace their more than 10-year-old cars.

"The Jordanian citizen who bears the high costs of maintaining and operating a car that's older than 10 years could benefit from the government tax incentive for the acquisition of a modern hybrid car, with the advantage of lower fuel costs," said Zaid Abu Kharroub, a journalist specializing in transportation issues.

Hybrid cars consume approximately half the fuel of regular models, he said.

RISE IN GAS PRICES HURTS CAR SALES

Yet, even as the sale of hybrid cars grows in Jordan, the sale of other models is in decline.

The tax incentives coincide with the government's November decision to liberalise the price of petroleum products and adopt monthly pricing mechanisms, which means fuel prices will fluctuate along with world market prices.

While these decisions may have increased government revenue and reduced harmful emissions, they have had a negative impact on the local market, said car dealership owner Alaa Abu Hadib.

"The data a decrease in the import and sale of cars in the Jordanian market starting from the second half of 2012 due to the government's decisions," he told Al-Shorfa.

According to Customs Department figures, 63,600 cars were imported into Jordan in 2012, a decline of 9% from the previous year.

Nabil Rumman, president of the Jordan Free Zone Investors Association, warned of a decline in the number of vehicles entering the Jordanian market and its impact on auto trade workers.

"The number of vehicles that were introduced to the local market via the Zarqa Free Zone in the first quarter of this year fell to less than 10,000 cars, compared with about 16,000 cars for the first quarter of 2012, a 38% drop," he said.