FILE (Photo credit: Reuters)
The Lebanese central bank announced on 12 September that it has entirely stopped providing dollars for gasoline imports, causing fuel prices to skyrocket across the country and placing further pressure on the nation’s volatile currency.
A central bank spokesperson told media that fuel importers must now source their dollars from the black market, where the Lebanese lira has been trending at around 35,000 per one US dollar.
Importers could previously obtain dollars to pay for imports from the central bank at the ‘sayrafa’ rate, which last week stood at 28,000 liras.
As a result of the central bank’s announcement, the price of 20 liters of gasoline jumped by 20,000 pounds on Monday, a significant hike in a country where eight out of every 10 people live below the poverty line.
“If there is more volatility in the exchange rate there will be more volatility in the fuel price,” Maroun Chammas, a member of the Association of Petroleum Importing Companies, told Reuters.
Authorities from Lebanon’s central bank were accused by the UN earlier this year of “human rights violations” for their role in manufacturing the country’s dire economic crisis.
Central Bank Governor Riad Salameh is wanted by Lebanese authorities for embezzling millions in public funds during his 30-year tenure as the head of the bank.
Salameh also faces money laundering probes in several European nations.
Lebanon’s energy crisis took a turn for the worse over the past year, with state-run power plants only able to provide a maximum of two hours of electricity per day. As such, Lebanese citizens rely on private generators to meet their energy needs.
The country has also been waiting for over a year for the implementation of a US-brokered energy sharing plan that involves Egypt, Jordan, and Syria.
While all preparations are ready for the energy plan to launch, Washington is holding up the process by refusing to provide Cairo and Amman with sanctions waivers.
But as Beirut awaits Washington to provide the waivers, Iran is waiting for Lebanese officials to move forward with accepting an offer of “free fuel.”
On 10 September, Iran’s ambassador to Lebanon, Mojtaba Amani, reiterated Tehran’s readiness to “provide Lebanon with fuel, construct new power stations, and rehabilitate existing power networks.”
A day earlier, Lebanese Energy Minister Walid Fayyad revealed that a Lebanese technical delegation would visit Iran soon, despite the roadblocks set by Prime Minister Najib Mikati.
“It will be a starting point for implementing the electricity plan developed by the ministry … it will provide citizens with power supply at a lower cost than that offered by private generators,” Fayyad said.