July 28, 2021

30% fuel price hike in Lebanon amid social anger

In the aftermath of the blocking of several roads in Lebanon to protest against serious gasoline shortages that have caused endless queues in front of service stations, fuel prices rose on Tuesday June 29 by more than 30% after a partial lifting of subsidies on petroleum derivatives, the first step before total elimination of subsidies.

In this country mired in an unprecedented crisis, angry demonstrators on Monday blocked roads and set tires and dumpsters on fire in several regions of the country. The population is also outraged by the draconian power cuts, which sometimes last for more than twenty-one hours a day, and by the rationing imposed by neighborhood generators due to fuel shortages. The latter had also caused malfunctions in some hospitals as well as a stoppage of activity at the headquarters of general security in Beirut, according to local media. A correspondent for Agence France-Presse also reported that the capital’s main roads were blocked in the early evening by angry protesters.

With the depreciation of the Lebanese pound, which has not ended for nearly two years, the central bank provided importers with 85% of the dollars needed for their activities at an official rate much more advantageous than that of the black market – where the banknote green is trading at more than 17,000 pounds – so far mitigating the fallout from the monetary collapse and curbing prices at the pump. But faced with the gradual depletion of the reserves of the Bank of Lebanon, the general directorate of petroleum at the energy ministry announced Monday evening that a new fuel price grid would be in force on Tuesday at an exchange rate of 3. 900 pounds to the dollar, compared to 1,507 previously.

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Relieve shortages

As a result, the price of a 95-octane gasoline can on Tuesday increased by nearly 16,000 Lebanese pounds (9 euros at the official rate), reaching 61,000 pounds (35 euros), according to the national news agency. . The price of 20 liters of 98 octane gasoline has climbed 16,300 pounds (9.1 euros), reaching nearly 63,000 pounds (35.5 euros). As for the price of a can of diesel, it jumped to 46,100 pounds (26 euros), against 33,300 pounds (18.5 euros).

In recent weeks, scenes of motorists parked for hours in front of gas stations had become daily. Importers blamed the shortage on the central bank’s delay in opening new lines of credit, while officials blamed it on stockpiling large quantities by traders and smuggling to Syria.

On Monday, the central bank announced its readiness to provide dollars for importing fuel at the new rate in effect. This decision is expected to increase market supply and alleviate shortages. The president of the fuel distributors union, Fadi Abou Chakra, told ANI on Tuesday that six tankers had started unloading their cargoes.

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Since the start of the crisis – one of the worst in the world since 1850 according to the World Bank – in the fall of 2019, the Lebanese pound has lost more than 95% of its value against the dollar. In reaction to the deterioration of the situation, the Lebanese President, Michel Aoun, summoned the Supreme Defense Council to a meeting, organized on Tuesday, and devoted to “The security situation”. The country is experiencing an explosion in unemployment and inflation, which have accelerated large-scale impoverishment, with half of the population now living below the poverty line according to the United Nations. The country has also been without a new government for more than ten months.

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The World with AFP