Lebanon raises fuel prices, partially lifts subsidies

: Oil products
21/08/22

The Lebanese government increased fuel prices today amid the partial reduction of subsidies on fuel oil prices, in a move aimed at easing the country's fuel supply crisis.

The government raised the prices of gasoline and diesel effective today by more than 66pc and 73pc, respectively. The 95R gasoline price is now 129,000 Lebanese Pounds per 20 liters (LBP 6,450/liter), while the 98R gasoline is now at LBP 133,200/20 liters. The price of the diesel stands at LBP 101,500/20 liters.

The announcement comes after a deal was struck on Saturday by the Lebanese president, caretaker prime mister and central bank governor, as well as the ministers of finance and energy to set aside up to $225mn to subsidise fuel imports until the end of September, according to state-owned NNA.

Fuel prices are now based at the dollar exchange rate of LBP 8,000 instead of LBP 3,900.

Lebanon's central bank, which manages the system of fuel imports, announced on 11 August that that it would be putting an end to fuel subsidies as the country can no longer afford to foot the bill.

The value of the Lebanese pound has fallen by 90pc in two years and around half the population live below the poverty line. The episode could rank among the three worst financial crises of the past 150 years, the World Bank said.

Power cuts last for several hours each day and streets full of cars queuing for rationed allowances of fuel have become a common sight.

The decision comes a week after a fuel tanker exploded in Lebanon's Akkar province killing at least 28 people and injuring 79.

Lebanon's Hezbollah said on 19 August that it has arranged the first shipment of fuel oil from Iran to Lebanon, in a bid to ease the fuel supply crisis in the country, without specifying further details.

Iraq has recently signed a deal with the Lebanese government allowing it to broker 1mn t — or 6.45mn bl — of Iraqi fuel oil for a year in exchange for goods and services.

By Sarah Raffoul

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