Jordan put an imminent increase in gasoline prices on hold on Friday, state media said, after public anger about tax hikes recommended by the IMF spilled into the streets this week.
State news agency Petra quoted Prime Minister Hani Mulki as saying that on the orders of King Abdullah he had revoked the decision to raise gasoline prices, which had been due to go into effect just after midnight on Friday.
A government committee reviews gasoline prices each month in accordance with global market fluctuations after scrapping fuel subsidies in 2012. It raised gasoline prices last month but the June increase would have been bigger.
Hundreds of protesters converged on the prime minister's office late on Thursday night in the heart of the capital chanting anti-government slogans and calling on the government to resign in protest at the latest wave of price hikes.
Public frustration has been growing since the cabinet sent a new draft tax bill to parliament last month that doubles the tax base. It followed steep general sales tax hikes earlier this year and the abolition of bread subsidies.
The authorities, echoing the IMF, argue that only four percent of Jordanians pay personal income tax and that they need to combat widespread tax evasion. The tax proposals under a three-year International Monetary Fund program are essential to generate more state revenue to gradually bring down public debt to 77 percent of GDP in 2021.
Jordan's economy has been struggling with stagnant growth and chronic deficits worsened by the absence of large foreign capital inflows or sufficient infusions of foreign aid.
The intervention of the monarch, who traditionally acts as an arbiter and unifying force, defused protests planned by civic activists, in the capital and provincial towns, against the price hike after Friday prayers, witnesses and activists said.
Thousands of Jordanians heeded a strike call by unions on Wednesday to protest at the IMF dictated tax rises they say will worsen an erosion in living standards.
Jordan has in the past witnessed bouts of civil unrest and protests in the capital and provincial towns after unpopular IMF-driven steep subsidy cuts and gasoline price hikes.