Oil Syndicates Agree to Share Losses Resulting from Dollar Shortage

Caretaker Energy Minister Nada Bustani on Monday announced that all oil sector syndicates have agreed to share losses resulting from the country’s dollar shortage crisis.

After a meeting with the heads of the syndicates, Bustani said each stakeholder will contribute a certain share.

The minister however noted that the contributed shares will not be sufficient to cover the entire exchange rate losses.

“The prices schedule will be issued on Wednesday,” Bustani said.

“I will not allow the credit mechanism that the central bank has imposed on gas station owners to be turned into a burden on citizens. The burdens will be distributed on the syndicates so that citizens don’t bear them,” the minister added.

Gas station owners had staged a strike on Friday, bringing the country to a standstill and drawing angry reactions from citizens, especially taxi drivers and delivery workers.

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 been grappling with widespread anti-government protests since October 17, a free-falling economy, and an escalating liquidity crisis.

The dollar exchange rate in the parallel market has shot up from the pegged rate of 1,507 pounds to the greenback to around 2,250.

Banks have meanwhile imposed restrictions on withdrawals and transfers.