LIMS’ advocacy campaign to repeal subsidies was successful, as the government came to an agreement to end subsidies by the end of September. LIMS has been on the frontlines explaining that the nationwide fuel scarcity is not due to “greedy” gas stations, nor because of a foreign embargo on Lebanon, and not even due to Lebanon’s economic recession and financial crisis. The only reason Lebanon is suffering from fuel shortages is the subsidy policy adopted by the Lebanese government and financed by the central bank that should be repealed. LIMS insisted that fuel shortages will end immediately after lifting subsidies.
In fact, subsides lowered the fuel price, in turn incentivizing the smuggling and hoarding of the resource. This has resulted in electricity outages and long queues at gas stations. The fuel scarcity crippled all sectors of the economy and forced numerous hospitals, businesses, and industries to shut down completely. To add insult to injury, the central bank subsidy program (CBSP) was financed by people’s dollar deposits at commercial banks. Clients only had access to freshly printed LBP withdrawals from their USD accounts, enhancing the severe currency depreciation.
With the new policy in place, the central bank that used to provide dollars for fuel imports at a subsidized amount will switch to the SAYRAFA rate starting October, which mirrors the black-market rate. LIMS recommended that the central bank’s involvement should only be temporary, before completely exiting the fuel market. Fuel importers, like all other importers, should turn to the market to secure the needed dollars.
LIMS has continued to urge the lifting of all subsidies without delay, even if the alternative cash cards haven’t been rolled out yet. LIMS went on to propose 2 solutions to the increased fuel prices: (1) establishing a currency board that stabilizes and strengthens the Lebanese pound, effectively lowering the cost of all commodities, and (2) improving the public transport sector by revising the corresponding laws, namely, to increase the number of licensed taxi plates, abolish the mandated taxi service fees, and allow private investments in the sector.
Click Here for the List of Interviews on the Topic
*|IF:ARCHIVE_PAGE|*LIMS Media Interviews:
- Central Bank No Longer Subsidizing Fuel, September 7, 2021: Al Jadeed, TV Interview AR
- Restrictions on The Import Of Diesel Oil Lifted, September 10, 2021: Nidaa Al Watan, Article AR
- Authorities Are Committing A Premeditated Crime By Prolonging Fuel Subsidies, September 20, 2021: Nidaa Al Watan, Article AR
- Dollar Exchange Rate After September, A Fine-Tuned Rise, September 21, 2021: Lebanese Forces, Article AR