Arab Press

بالشعب و للشعب
Tuesday, Aug 05, 2025

Lebanon Leaders Reach Short-term Deal on Fuel Subsidies 

Lebanon Leaders Reach Short-term Deal on Fuel Subsidies 

Lebanese leaders agreed to a short-term compromise to maintain fuel subsidies, the presidency and prime minister's office said Saturday, a move that will trigger more price hikes.

Earlier this month, the central bank said it could no longer support fuel imports at a preferential exchange rate, in what many saw as a de facto end to subsidies.

Widespread panic ensued, with distributors scaling back deliveries until new prices were announced and desperate motorists forming long queues outside gas stations.

At a time when the state electricity supply is almost nonexistent, fuel oil to run backup generators to power homes, businesses and even hospitals has also been in short supply.

On Saturday evening, the presidency announced approval of a "request for the Bank of Lebanon to open a temporary account to cover urgent and exceptional subsidies for fuel."

Up to $225 million would be set aside to subsidize imports of gas, fuel oil and cooking gas until the end of September, it said.

The compromise was struck at a meeting attended by the president, the central bank chief and the caretaker prime minister, as well as the outgoing ministers of finance and energy.

Currency hit hard


Lebanon's currency, the Lebanese pound, is officially pegged at 1,507 to the U.S. dollar, but it has lost more than 90% of its value on the black market.

The central bank previously provided fuel importers with dollars at an intermediate exchange rate of 3,900 pounds to the dollar, and fuel prices were fixed by the energy ministry based on this rate.

The Bank of Lebanon would now ensure the ministry could set prices based on an exchange rate of 8,000 pounds to the dollar, the presidency and the prime minister's office said, signaling a new increase in the price of petrol and fuel oil.

Lebanese officials have blamed the fuel crisis on hoarding by distributors seeking to sell at higher prices, as well as smuggling to war-torn Syria.

Lebanese economist Nassib Ghobril said the agreement was a compromise that sought to allow fuel importers to release more stock and reduce shortages.

"But it will not solve the problem," the chief economist at the Byblos Bank Group said.

"The solution is to lift subsidies completely. That would lead to the disappearance of these long lines at the gas stations, and discourage smuggling," he said.

Crackdown on hoarding, smuggling


In recent days, the army has forced filling stations hoarding petrol to sell it, and security forces have cracked down on smuggling.

Saturday's decision came a week after a fuel tank blast killed more than 30 people clamoring for petrol in northern Lebanon.

Lebanon is mired in what the World Bank has described as one of the world's worst economic crises since the 1850s. More than three-quarters of its population now lives in poverty.

The U.N. children's agency earlier on Saturday warned power cuts were also impeding access to safe water.

"More than four million people across Lebanon … face the prospect of critical water shortages or being completely cut off from safe water supply in the coming days," UNICEF said in a statement.

"UNICEF is calling for the urgent restoration of the power supply — the only solution to keep water services running."

The government stepped down a year ago after a massive blast in Beirut port that killed more than 214 people, but it has stayed on in a caretaker capacity amid deadlock over a replacement lineup.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
Germany Enters Fiscal Crisis as Cabinet Approves €174 Billion in New Debt
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Qatar Airways Clears Backlog of Passengers Following Missile Threats
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
×