A man fills his motorcycle tank. (Credit: João Sousa)
BEIRUT — Gas stations will be forced to close to stop the "hemorrhage" of lost revenue as the lira further plummeted Friday morning, Gas Station Owners' Syndicate spokesperson George Brax told L'Orient Today.
The Lebanese lira continued to depreciate on the parallel market on Friday morning, trading at more than LL35,000 against the dollar before falling back to LL34,600 by the end of the day. The gap between this rate and that of the Sayrafa platform (LL27,400), designed by Banque du Liban to try to stabilize the exchange rate, has widened further, now amounting to over LL7,000. The plummeting pound led to two successive increases in fuel prices during the day, with 20 liters of 95-octane gasoline reaching LL616,000 and 20 liters of diesel reaching LL779,000.
Since late last summer, the prices in Lebanese liras of gasoline sold in Lebanon are set by the Energy Ministry according to the world oil prices on one hand, and the exchange rate of the Sayrafa platform on the other. However, Brax said, Lebanese authorities seem to be moving towards a new pricing mechanism that would eliminate the partially subsidized pricing altogether.
The payment ratio for fuel imports has gradually fallen in recent weeks, increasing the dollar exchange rate for imported gasoline. Brax told L’Orient Today Friday that fuel importers now must pay for 60 percent of their orders at the parallel market rate and only 40 percent at the BDL’s subsidized Sayrafa rate. Importers were last making 55 percent of each payment at the Sayrafa rate.
The Lira depreciation prompted new increased fuel prices which were announced Friday morning with 20 liters of gasoline now costing LL603,000. Put into perspective, this sum is equivalent to around $400 at the official lira-to-dollar exchange rate of LL1,500 while the Lebanese minimum wage remains at $450.
In a statement on Friday, Gas Station Owners' group corroborated what Brax said, pointing out that they anticipate the closure of most gas stations "to stop the hemorrhage" of lost revenues that started at the onset of the crisis.
In the South, our correspondent Mountasser Abdallah confirms that several stations were closed this afternoon in Saida. "Our tanks are full, but we decided to close to protect ourselves," said one owner.
No fuel shortage
Fadi Abou Chakra, the head of the Fuel Distributors' Syndicate, told L’Orient Today that a second updated list of fuel prices will be announced later today, denying that there was a fuel shortage or that there would be gas station closures.
Meanwhile, the Syndicate of Workers and Distributors in the Gas and Supplies Sector said in a statement Friday that their director had contacted the Energy Minister's office asking him to issue new fuel prices, "provided that the new prices take into account changes in the exchange rate to protect the interests of the distributors and citizens alike."
The significant rise in fuel prices amid Lebanon's crippling economic crisis has led to a decline in consumption. The average amount of fuel consumed daily in Lebanon dropped 14 percent in the first seven months of 2022 compared to the same period of the previous year amid a deepening economic crisis that saw fuel prices rise around fivefold since August 2021, according to a study conducted by Beirut-based research center Information International.