A line of motorists in front of a gas station in South Lebanon, Dec. 28, 2022. (Courtesy of: Mountasser Abdallah)
BEIRUT — After turbulent changes in the value of the Lebanese lira on the parallel market in recent days, is a new gas crisis looming? On Wednesday morning, fuel prices recorded a sharp drop, by almost 18 percent, as prices at the pump were calculated on the basis of the central bank's Sayrafa platform rate (LL38,000 to the dollar as of Wednesday), while the market rate stood at around LL44,000.
This discrepancy sparked some gas stations to close, causing long queues of motorists reminiscent of the chaos that reigned during the summer of 2021.
Wednesday's new fuel prices were as follows:
• Twenty liters of 95-octane gasoline: LL629,000, down by LL137,000.
• Twenty liters of 98-octane gasoline: LL646,000, down by LL141,000.
• Twenty liters of diesel: LL700,000, down by LL152,000.
• Gas cylinder: LL413,000, down by LL90,000.
• One kiloliter of fuel oil (used to supply private generators): $834.53, unchanged.
A 'crisis' on New Year's Eve?
Reacting to the new prices, the spokesman for the union of gas station owners, Georges Brax, blasted the fact that they were calculated at Banque du Liban's Sayrafa rate, while gas station owners said they could not get dollars at the same rate from banks and had to buy them at the parallel market rate.
According to Brax, gas stations on Wednesday saw "losses of more than LL800,000 per can of gasoline."
He urged BDL governor Riad Salameh and the Association of Banks in Lebanon to facilitate the purchase of dollars at the Sayrafa rate to the owners of gas stations, "otherwise the prices will have to be calculated again at the parallel market rate."
"We are heading inevitably to an unwanted crisis on the eve of the New Year," Brax warned.
In a statement, the Energy Ministry said it welcomed the price cut, saying it will allow "the entire Lebanese population to save money." The Ministry then stressed that this mechanism "will succeed if the BDL and private banks are committed to ensuring the dollars (on the Sayrafa rate) to companies and private individuals."
The ministry stressed that it is "not responsible for setting the adopted exchange rate," but that the BDL is in charge of it.
Queues of motorists
Following the new mechanism, many gas stations have closed their doors amid the sharp drop in prices. This was the case in Saida in the South, and in Akkar in the North, according to our correspondents, with photos showing long lines of motorists.
Similar scenes were reported in other parts of the country, including Hazmieh and Dekwaneh in the suburbs of Beirut, according to several witnesses.
The Lebanese lira experienced a new phase of strong fluctuations on the first working day following the long Christmas weekend, which was a holiday for bank employees such as those of BDL.
While it had been rising in record time for the past 10 days, successively from LL44,000 to LL47,000 over this period, the dollar finally started to fall back, floating around LL44,000 on Wednesday, according to agents and websites displaying the rate.
Once again, the BDL seems to be at the root of the turmoil. Shortly before the market changed course, it issued two communiqués announcing exceptional measures concerning its own exchange platform, Sayrafa, whose rate is several thousand pounds lower than the free market.
The first measure increased the Sayrafa rate, which is usually changed every working day in the early evening. Set at LL31,200 to the dollar on Friday night, it was raised to LL38,000 on Tuesday morning, a level not seen since the platform was launched in its current form in May 2021. The second was to lift all buying and selling limits for "individuals and companies" at banks, "until further notice."
Additional reporting contributed by Mountasser Abdallah and Michel Hallak
