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Agencies
Beirut
Lebanese fuel prices are expected to double after the state decided on Saturday to change the exchange rate used to price petroleum products in a bid to ease crippling shortages that have brought Lebanon to a standstill.
Though prices will rise, the move fell well short of lifting the exchange rate for pricing fuel to the exchange rate at which the central bank will finance its import, meaning the state will continue to effectively subsidise fuel for now.
The central bank will open an account to finance the subsidy up to a maximum of $225 million until the end of September - funds the government will have to pay back in the 2022 budget, according to a statement. Roads have been clogged across Lebanon as motorists have been queuing for the little gasoline that is left in the country. Prices have soared on the black market and confrontations at gas stations have become a daily occurrence.
The fuel crisis, a result of Lebanon’s two-year-long financial meltdown, worsened earlier this month when the central bank said it could no longer finance fuel imports at heavily subsidised exchange rates and would switch to market rates.
The government objected to that decision, refusing to change official selling prices based on an exchange rate of 3,900 pounds to the dollar. The standoff left importers in limbo and caused supplies to dry up across the country.
According to Saturday’s decision, official selling prices will now be based on an exchange rate of 8,000 pounds to the dollar, still well below the rate on the unofficial parallel market where dollars change hands at close to 20,000 pounds.
Beirut
Lebanese fuel prices are expected to double after the state decided on Saturday to change the exchange rate used to price petroleum products in a bid to ease crippling shortages that have brought Lebanon to a standstill.
Though prices will rise, the move fell well short of lifting the exchange rate for pricing fuel to the exchange rate at which the central bank will finance its import, meaning the state will continue to effectively subsidise fuel for now.
The central bank will open an account to finance the subsidy up to a maximum of $225 million until the end of September - funds the government will have to pay back in the 2022 budget, according to a statement. Roads have been clogged across Lebanon as motorists have been queuing for the little gasoline that is left in the country. Prices have soared on the black market and confrontations at gas stations have become a daily occurrence.
The fuel crisis, a result of Lebanon’s two-year-long financial meltdown, worsened earlier this month when the central bank said it could no longer finance fuel imports at heavily subsidised exchange rates and would switch to market rates.
The government objected to that decision, refusing to change official selling prices based on an exchange rate of 3,900 pounds to the dollar. The standoff left importers in limbo and caused supplies to dry up across the country.
According to Saturday’s decision, official selling prices will now be based on an exchange rate of 8,000 pounds to the dollar, still well below the rate on the unofficial parallel market where dollars change hands at close to 20,000 pounds.
