LIMS released an exclusive story on the penalties paid by Lebanon on fuel imports. The Ministry of Energy and Water promised Lebanon 4 hours of electricity per day for a 6-month period in return for 300 million dollars. The money was supposed to come from the Special Drawing Rights received by Lebanon from the IMF. However, the vessels have been anchored off Lebanon’s coast for 2 weeks, waiting for financial credits before unloading the cargo, and raking up a daily penalty of $72,000 USD for the delays. 

LIMS argued that Article 112 of the Public Accounting Law stipulates that the minister is personally responsible for those penalties. The ministry committed two main violations: (1) the fuel purchase deal was signed prior to obtaining the necessary credit, and (2) a short timeframe was set between signing the contract and requesting delivery, making it impossible for Lebanon to secure the credit on time.

LIMS also explained that the World Bank had a better deal for Lebanon promising to secure funds to allow importing gas from Egypt and electricity from Jordan. However, the World Bank stipulated that (1) electricity price increase so that Lebanon can cover the cost of imports, and (2) electricty regulatory authority (ERA) members be appointed to ensure good governance. Even though the ministry just increased the electricity prices, it has refused to appoint the ERA members aiming to maintain its direct control over the sector and act in the sector without supervision.

LIMS’ pressure on the need for the minister to cover the cost of penalties from his own pocket led to positive results, since the minister promised to negotiate with the supplier waving penalties.

LIMS Media Interviews:

• LIMS Exclusive: Council Of Ministers Did Not Address Problem Of Fuel Fines That Are Still Accumulating And The Minister Carries Them To Citizens, January 23, 2023: LIMSLB, Article AR 
• Walid Fayyad Committed A Crime Against Depositors…Will The Council Of Ministers Catch It Tomorrow? January 18, 2023: Janoubia, Interview AR 
• LIMS Exclusive: Reasons For Accumulation Of Financial Penalties In The Purchase Of Electricité Du Liban And Ways To Secure Financing: LIMSLB, January 11, 2023: Article AR 
• Lebanese Ministry Of Energy Crimes. Bidding At The Expense Of The People? January 18, 2023: Jusur, Article AR 
• LIMS Exclusive: Government Session Aims To Charge The Treasury More Than One Million Dollars In Fines, Which Will Be Borne By The Minister Of Energy With His Own Funds, January 16, 2023: LIMSLB, Article AR 
• Who Will Pay The Late Fees For The Fuel Ships? January 12, 2023: Lebanon Debate, Article AR