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Lebanon central bank can no longer subsidise fuel imports

beirut taxi driver
Beirut taxi drivers protest petrol shortages.

Lebanon’s Central Bank Governor Riad Salameh announced on Wednesday that the central bank will lift subsidies on fuel imports, al-Jadeed local TV channel reported.

“The Central Bank of Lebanon can no longer open lines of credit for fuel imports or subsidise its purchase,” Salameh said.

As the economic crisis has accelerated, Lebanese have been forced to adapt in painful ways. They are obliged to waste a large part of their days waiting on line for fuel at petrol stations.  They have to climb stairs because elevators lack power,  and they must cut out meat or skip meals because food prices have skyrocketed.

A monthly salary of LPB 1.2 million, which had been worth $800 before the crisis, is now worth less than $80.

In consequence of this latest action by the central bank, fuel importers have to buy the US dollars from the black market at the rate of over LBP 20,000 per dollar, rather than from the central bank at the official rate of around LBP 1,500 LBP per dollar.

This will exacerbate the fuel crisis in Lebanon, which has lately seen increased hours of power cuts and long lines of cars queuing at gas stations.

Lebanon’s harsh living conditions have recently caused multiple deaths and injury cases among citizens fighting for food, medicines and fuel. Tensions over scarce fuel supplies in Lebanon descended into deadly violence on Monday that killed three men, the country’s news agency reported.

The National News Agency said that in one incident, a gunfight erupted over a deal about a fuel sale, apparently following a disagreement and leaving two men dead. The violence started in the area of Badawi and extended to Bab al-Tibenneh in the northern city of Tripoli, it reported. Details of the disagreement were not immediately clear, but the agency said the men exchanged fire and at one point, a hand grenade was thrown.

 

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