Lebanon raises fuel prices by 66% as it tries to alleviate shortages

BEIRUT, Aug 22 (Reuters) – The Lebanese government said on Sunday it would raise gasoline prices by 66% in a partial reduction in fuel subsidies as it seeks to alleviate the crippling shortage it has stopped. the country.

The 95-octane gasoline price increase would take effect immediately, the government said in a statement. It follows Saturday’s state decision to change the exchange rate used to set the price of petroleum products to try to alleviate the shortage.

The fuel crisis worsened this month when the central bank said it could no longer finance fuel imports at heavily subsidized exchange rates and would switch to market rates.

The government, concerned about the impact of price hikes, in a compromise agreed on Saturday with the central bank to raise prices, but below the market rate, to allow resumption of subsidized imports for now.

Rising prices will make it more difficult in a country where poverty levels have skyrocketed during a two-year financial collapse that has wiped out more than 90% of the value of the Lebanese pound.

The decision was made at an emergency meeting on Saturday, attended by the president, central bank governor and other officials over a fuel crisis that has left Lebanon in chaos, paralyzing basic services and causing daily tunes. while people shoot for fuel. Read more

The price increase does not completely elevate the exchange rate of fuel prices to the exchange rate at which the central bank will finance its imports, a gap that the state will continue to finance, for the time being.

The government said the central bank will open an account for this purpose up to a maximum of $ 225 million by the end of September, funds that the government will have to return to the 2022 budget.

The Lebanese group Hezbollah, backed by Iran, has organized a fuel shipment from Iran to help alleviate fuel shortages in Lebanon. Read more

Written by Tom Perry and Suleiman Al-Khalidi; Edited by Susan Fenton

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