Lebanon Raises Fuel Prices to Ease Shortages

Date: 22 August 2021 - 21:25

News ID: ۹۳۴۵۸

BEIRUT (Dispatches) – The Lebanese government said on Sunday that it was raising gasoline prices by 66% in a partial reduction of fuel subsidies as it seeks to ease crippling shortages that have brought the country to a standstill, reports Reuters.
The increase in 95-octane gasoline prices would take effect immediately, the government said in a statement. It follows the state’s decision on Saturday to change the exchange rate used to price petroleum products in a bid to ease the shortages.
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 rises, in a compromise agreed with the central bank on Saturday to raise prices, but by less than the market rate, to allow subsidized imports to resume for now.
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 sparking daily melees as people scramble for fuel.
The price increase does not fully lift the exchange rate for pricing fuel to the exchange rate at which the central bank will finance its import – a gap which the state will continue to finance.
The United Nations Children’s Fund (UNICEF) warned that millions of people in Lebanon could face a critical shortage of water or be cut off completely in the coming days in the wake of a severe fuel crisis in the cash-strapped Arab nation.
“Vital facilities such as hospitals and health centers have been without access to safe water due to electricity shortages, putting lives at risk,” UNICEF Executive Director Henrietta Fore said in a statement on Saturday.
“If four million people are forced to resort to unsafe and costly sources of water, public health and hygiene will be compromised, and Lebanon could see an increase in waterborne diseases, in addition to the surge in COVID-19 cases,” she noted.
The senior UN official also urged the formation of a new Lebanese government to tackle the crisis.
Last month, UNICEF warned that water supply systems were on the verge of collapse in Lebanon, and over 71 percent of the country’s population was at the risk of losing access to water.
“The water sector is being squeezed to destruction by the current economic crisis in Lebanon, unable to function due to the dollarized maintenance costs, water loss caused by non-revenue water, the parallel collapse of the power grid and the threat of rising fuel costs,” UNICEF Representative in Lebanon Yukie Mokuo said at the time.
Lebanon has been mired since late 2019 in a deep economic and financial crisis, exacerbated by a political deadlock.
The economic and financial crisis is the gravest threat to the country since the 15-year civil war ended in 1990.
The crisis is mostly linked to the sanctions that the United States and its allies have imposed on Lebanon as well as foreign intervention in the Arab nation’s domestic affairs.