Lebanese fear more hardships after fuel subsidies are lifted
The Lebanese are expecting higher gasoline prices in light of the central bank’s decision to lift subsidies amid market chaos, dollar exchange fluctuations and devaluation of salaries in the Lebanese pound.
BEIRUT — Lebanon’s Central Bank has lifted its remaining subsidies on fuel and stated Sept. 12 that it will no longer provide US dollars for gasoline imports, a move that will force the Lebanese to procure fuel at a volatile market rate.
Until recently, the central bank secured 40% of fuel import costs in US dollars at sub-market rates set by its foreign exchange platform, known as Sayrafa. The electronic platform developed by the bank sets the exchange rate according to a daily pricing close to the parallel market exchange rate, standing now at around 28,000 Lebanese pounds to the US dollar. The remaining 60% was paid by importers in dollars on the black market.
The latest central bank decision to lift subsidies forces gas station owners to pay the full price of fuel at the country's black market rate, with the dollar trading Sept. 15 at around 37,000 Lebanese pounds.
In previous months, the central bank had gradually scaled down its expensive subsidies program. The complete end of subsidies will inevitably burden the cash-strapped country battling a crushing economic crisis.
