BDL has been asked to disburse a loan approved by Aoun and Diab for fuel to generate electricity

BEIRUT — Lebanon’s Finance Ministry has sent an official request to the central bank governor asking him to approve a treasury advance that would enable the state electricity company to purchase fuel, as fears of prolonged power blackouts loom large over the country.

The request comes shortly after President Michel Aoun approved an exceptional loan of up to 300 billion lira ($200 at the official exchange rate) for the state-run Électricité du Liban company to import fuel for generation before supplies run out, an official statement said.

Lebanon is mired in a financial crisis caused by a mountain of debt built up since the end of the 1975–90 Civil War, leaving the country struggling to find enough foreign currency to pay for fuel and other basic imports.

The president’s approval of the loan followed a meeting last week between caretaker Prime Minister Hassan Diab and top economic policy makers to remove hurdles that had delayed disbursing the funds, the official statement said.

Parliament approved the loan in March, but a committee then reviewed its legality.

The Lebanese have long learned to live with regular power cuts that span a few hours a day in the capital and much longer in other areas because the state power plants cannot meet demand. Many people rely on private generators, and the head of the private generator owners’ syndicate, Abdo Saade, told L'Orient Today on Saturday that members would begin reducing generators’ operating time by five hours per day because of fuel shortages.

Lebanon usually keeps enough fuel for about two months or so, as it is too costly to hold strategic reserves for longer.

The economic meltdown has fueled unrest, locked depositors out of their bank accounts and hammered the currency, which has lost about 90 percent of its value against the dollar.

The exchange rate for the loan to buy fuel is calculated at the official rate of LL1,500 to the dollar, although the lira rate on the unofficial market has collapsed to about 13,000 to the dollar since the crisis erupted in late 2019.