BEIRUT, Sept. 12, 2022 (Xinhua) Gasoline prices in Lebanon rose today (Monday) after the Central Bank stopped subsidizing the cost of its imports.
The price of a 20-liter can of gasoline, according to the schedule of the Ministry of Energy, amounted to 638,000 pounds (equivalent to 18 dollars according to the black market exchange rate), recording an increase of 20 thousand pounds from yesterday’s prices (Sunday).
A member of the Syndicate of Gas Station Owners, George Al-Barraks, said in statements that the gasoline price schedule issued by the Ministry of Energy included the complete lifting of subsidies on gasoline, which was done through the “exchange” platform of the Central Bank.
A director at the Central Bank told Xinhua that the bank had completely stopped subsidizing gasoline, noting that it had begun a while ago to reduce subsidies for importing it by providing foreign currency to suppliers at a price lower than the black market prices.
He added that the bank’s decision comes in order to avoid the continued depletion of foreign currency reserves.
The suspension of this support comes within the framework of a government policy to reduce expenditures amid a severe financial and economic crisis hitting the country.
The Central Bank used to secure 55 percent of the import dollars for oil companies at the exchange rate, which amounted to 28,400 Lebanese pounds today, while companies buy the remaining 45 percent of dollars from the black market, where the dollar exchange rate today recorded 35,600 pounds.
The decline in foreign exchange reserves with the Central Bank caused the lack of cash for imports, which prompted the government to gradually reduce fuel subsidies over the past months, in order to stop it.
The inability of the Central Bank to secure dollars to importers would push them to secure their needs for imports from the parallel market, which, according to experts, would increase pressure on the Lebanese pound and raise commodity prices.
In light of the lack of unification of the exchange rate of the US dollar in Lebanon, the exchange market witnesses four rates for the dollar, where the official exchange rate is 1515 pounds, while the dollar of a bank deposit is exchanged at a value of 8,000 pounds, and more than 28 thousand on the “exchange” platform, and exceeds 35,000 in Black market.
Since 2019, Lebanon has been suffering from a severe financial and economic crisis, embodied in the scarcity of foreign currency, the collapse of the value of the Lebanese pound, the imposition of restrictions on the withdrawal of bank deposits, the government’s suspension of external and internal debt payments, the high rates of poverty, unemployment, inflation, and shortages of fuel, medicines and infant formula. The World Bank ranked it among the worst in the world. world since the middle of the last century. /ts/