Scarce Fuel Supplies Impact Lebanon, Central Bank to Offer Credit Lines for Fuel Imports
Posted on 08/11/2021
Banque du Liban is the central bank of Lebanon. Lebanon’s central bank said it would offer credit lines for fuel imports based on the market price for the Lebanese pound from August 12, 2021. This measure essentially is closing a fuel subsidy that has helped drain its reserves since Lebanon feel deep into a financial crisis that unfolded in 2019. Lebanon has faced months of severe fuel shortages, prompting long lines at gas stations. Lebanon is dependent on private generators for power. The price of a gallon of fuel has increased by more than 220% in 2021. The Lebanese Pound has collapsed to record lows.
Lebanon’s national electricity company, Electricité du Liban (EDL), is dependent on imported fuel. In July 2021, Lebanon’s two main power plants were switched off plunging much of the country into a near-total blackout. Lebanon’s two biggest power stations, Deir Ammar and Zahrani, which total around 40% of the country’s electricity was shutdown.
Tensions over scarce fuel supplies in Lebanon descended into deadly violence on Monday. Lebanon’s news agency reported three men that were killed.