Cars Queue at Gas Stations amid Renewed Exchange Rate Crisis

Vehicles were on Thursday queuing at gas stations in Beirut and Sidon after station owners said they would soon run out of stocks due to a renewed dollar exchange rate crisis.

“The fuel problem has not been resolved because those who should resolve it – the central bank and the Energy Ministry – have not come up with a complete solution but rather half a solution,” the Syndicate of Gas Station Owners and the Syndicate of Fuel Tanker Owners and Fuel Distributors said in a joint statement.

“Instead of implementing PM Saad Hariri’s commitment towards the sector on securing 100% of the price of fuel in Lebanese lira, Banque du Liban has only provided 85%, and moreover it has imposed a 0.5% commission and demanded a 30-day freezing of funds in its accounts, which has created an unbearable additional cost,” the statement said.

“We will continue to sell the existent stock until it runs out,” the statement added.

On September 30, the central bank said it would facilitate access to dollars for importers of petroleum products, wheat and medicine.

"Banks that issue letters of credit for the importation of petroleum products (petrol, fuel oil and gas), wheat and medicine will be able to ask the Banque du Liban to ensure the value of such credits in U.S. dollars," the central bank said.

The mechanism requires that a "special account" be opened at the central bank, and at least 15 percent of the value of the credit be deposited in it in U.S. dollars, as well as the full value in Lebanese pounds, it said, adding that the central bank would take 0.5 percent from each transaction.

Lebanon has had a fixed exchange rate of around 1,500 Lebanese pounds to the dollar in place since 1997.