Central Bank Reportedly Ends Subsidization of Fuel

The funds earmarked by the central bank for the subsidization of fuel “have run out,” an official source concerned with the file said on Tuesday.

“Banque du Liban has stopped granting permissions for subsidized importation,” the source told Annahar newspaper.

“The central bank is awaiting the appropriate time to officially announce the end of subsidization,” the source added.

Lebanese fuel prices soared by up to 70 percent in August after a subsidy cut by the central bank.

The cost of hydrocarbons in Lebanon has tripled in the two months since the central bank started decreasing its support for imports.

Dire shortages have seen citizens struggle to find enough fuel to drive to work or power back-up generators during near round-the-clock electricity cuts.

Motorists have become caught up in long lines outside the petrol stations that have remained open.

Frustrations have boiled over in recent weeks, with deadly scuffles breaking out at gas stations.

The explosion of a fuel tank in the north of the country has also killed more than 30 people.

The cost of 98- and 95-octane gasoline both rose on August 22 by around two-thirds, from August 11, according to prices posted by the National News Agency.

The cost of diesel soared by 73 percent over the same period, while cooking gas was up by half.

All three fuels have tripled in cost since June.

The central bank had agreed to support fuel imports at an exchange rate of 8,000 pounds to the dollar, up from a rate of 3,900 to the greenback set during a first de facto subsidy decrease in June.

Before that the central bank had provided importers with the foreign currency at the official rate of around 1,500 to the dollar.

The central bank said in August it could no longer afford to provide importers with dollars at any preferential rate, but the country’s top officials later reached a compromise with the 8,000 rate.