State-set prices for fuel dropped Friday in Lebanon. (Credit: Anwar Amro/AFP)
BEIRUT — Gas station owners' syndicate spokesperson Georges Brax attributed the decline in fuel prices to the Lebanese lira’s slight rebound in value to the US dollar in recent days, adding that prices could drop further if the lira exchange rate remains stable and international oil prices continue declining.
Here is what we know:
• Banque du Liban is still subsidizing 90 percent of gasoline imports at LL 20,400 per dollar, while the parallel market exchange rate, which is used to calculate the non-subsidized portion, decreased from LL 24,600 per US dollar to LL 23,600 dollar, Brax told the NNA on Friday.
• Brax explained that the cost of 20 liters of 95-octane decreased by only LL 1,600 because the parallel market rate factors for only 10 percent of the fuel’s total price, with the central bank covering the other 90 percent.
• As for diesel and cooking gas, Brax said their prices had more substantial declines because they are set wholly to the US dollar’s parallel market exchange rate to the lira.
• Brax said that if the lira does not depreciate in value to the US dollar, the coming weeks could witness further drops in fuel costs in Lebanon due to declining international oil prices, citing the policies of petroleum producers and market fears that the new Omicron variant of COVID-19 could cause economic downturn.
• On Thursday, the Organization of the Petroleum Exporting Countries, Russia and allies (OPEC+) agreed to continue increasing oil production, despite a drop in oil prices since October, Reuters reported.
• Brax’s comments came after Lebanon’s Energy Ministry announced a new price table earlier Friday for fuel products. The official prices of 20 liters of 95-octane and 98-octane gasoline decreased by LL1,600 and LL1,800 respectively and are now set at LL315,000 and LL325,200. Diesel decreased by LL14,000 to LL315,000, and cooking gas by LL11,400 to LL272,700 per tank.