President Michel Aoun meets with BDL Gov. Riad Salameh, caretaker Energy Minister Raymond Ghajar and caretaker Finance Minister Ghazi Wazni at the Baabda Presidential Palace. (Credit: Dalati & Nohra)
BEIRUT — President Michel Aoun has asked Riad Salameh to continue subsidizing fuel imports at a rate of LL3,900 to the US dollar, hours after the central bank head reaffirmed his decision to halt subsidies for fuel imports.
Here’s what we know:
• During a meeting in Baabda with Salameh, the caretaker finance and energy ministers and his advisers, Aoun asked the BDL head to abide by the government’s “exceptional approval” to partially end subsidies by financing fuel imports at the exchange rate of LL3,900 to the dollar until the end of September, a statement from the presidency reported.
• Without subsidies, fuel prices would likely jump as much as five times or more.
• Late on Wednesday, Banque du Liban announced that it will end fuel subsidies and finance fuel imports only at the parallel market exchange rate, which currently stands at about LL21,000 to the dollar.
• Earlier on Thursday, Salameh had issued a statement earlier Thursday reaffirming its decision to remove fuel subsidies, adding that the bank cannot legally dip into its mandatory reserves — 14 percent of the dollar deposits commercial banks must place at BDL — to subsidize imports. BDL also claimed that it had paid more than $800 million for fuel imports last month.
• However, the president reportedly said the “exceptional approval” authorized BDL to use its mandatory reserves to purchase fuel, and that removing subsidies on fuel imports has “serious social and economic repercussions [...] especially on the citizens’ living conditions.”
• As the governor left the Presidential Palace, protesters reportedly threw eggs at his convoy, while demonstrators across the country blocked roads to protest BDL’s decision.