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Lebanon hikes prices of fuel 66 percent to tackle shortages

This picture shows a Coral petrol station in the Lebanese capital Beirut, on August 19, 2021. - The key oil company in Lebanon said today it would stop supplying its gas stations with fuel amid severe shortages that have brought the crisis-hit country to a halt. (Photo by ANWAR AMRO / AFP)

BEIRUT: Lebanese authorities hiked fuel prices by 66 percent Sunday after the caretaker Cabinet and the Central Bank altered temporarily the exchange rate of the platform from LL3,900 to LL8,000.

Based on these new rates, the Energy Ministry said the prices of 98 octane gasoline is now LL133,200, 95 octane gasoline is set at LL129,000, diesel is LL101,500 and household gas bottle is LL90,400, provided that the rest of the oil derivatives’ prices remain based on the price composition table issued on 11/8/2021.

The ministry stressed in another statement that oil companies, gas stations and distributors must sell their stocks according to the schedule of 8/11/2020, until they run out of stocks..

But most of the gas stations in the country remained closed Sunday despite the decision to hike the prices.

Observers noticed that some of the gas stations that had old gasoline stocks started selling gasoline at the new rates, prompting the Army to send patrols to these stations to force them to sell their stocks at the LL3,900 rates.

Gas station owners said they were waiting for the new shipment of gasoline from the oil importing companies.

The caretaker Cabinet and the Central Bank on Saturday allocated $225 million for the purchase of gasoline, diesel and gas and pledged to totally lift the subsidies at the end of September to give the authorities a chance to issue the long-awaited ration card to 750,000 families

The decision came during an emergency meeting at Baabda Palace headed by President Michel Aoun.

A government source told The Daily Star that the participants in the meeting agreed to alter the exchange rate platform for fuel and diesel from LL3,900 to LL8,000, adding that this was only a temporary measure to prepare for the total lifting of the subsidies.

The source stressed that the Lebanese Army will escort the gasoline and diesel trucks from the distribution points to the gas stations to ensure that the fuel does not end up in the black market.

A statement from the presidential palace said Finance Ministry’s proposal was approved to request that Central Bank open a temporary account to cover the fuel subsidy, at the value of the difference between the dollar exchange rate on the “exchange” platform and the price approved in the price-installation table, set at LL8,000, provided that these differences are paid from the 2022 budget.

 

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