Lebanon raises the price of gasoline by 66% in an effort to ease the shortage

The Lebanese government announced today, Sunday, that it has raised the price of 95 octane gasoline by 66 percent in a partial reduction of fuel subsidies to ease the severe shortage that is crippling the country.

The government statement said that the price change takes effect immediately.

This follows a decision issued yesterday, Saturday, to raise the exchange rate used in pricing petroleum products, in an effort to alleviate the severe shortage.

The fuel crisis worsened this month when the central bank said it was unable to finance fuel imports at heavily subsidized exchange rates and would switch to market rates.

The government, fearful of the impact of price hikes, agreed to a compromise with the central bank yesterday to raise prices but below the market rate to allow subsidized imports to resume for the time being.

In turn, the General Directorate of Oil confirmed, in a statement published by the National News Agency, the adoption of the dollar exchange rate of 8000 Lebanese pounds for the purchase of fuel.

And on Saturday evening, the Lebanese presidency announced in a statement after a meeting chaired by President Michel Aoun, and devoted to addressing the crisis, “the approval of the Ministry of Finance’s proposal to request the Banque du Liban to open a temporary account to cover urgent and exceptional fuel support.”

The statement added that the maximum value of the support will amount to 225 million dollars to finance “the value of the difference between the exchange rate of the dollar according to the (exchange) platform and the approved price of eight thousand pounds to the dollar” for the purchase of gasoline, diesel and domestic gas and the maintenance of electricity plants until the end of September.

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