Lebanon bank boss slams criticism over ending fuel subsidies

Lebanon’s central bank governor has said nobody is running the country, hitting back after government criticism of his decision to halt fuel subsidies that have drained currency reserves.

In an interview broadcast on Saturday, Riad Salameh said the government could resolve the problem quickly by passing the necessary legislation.

Lebanon’s central bank governor has said nobody is running the country, hitting back after government criticism of his decision to halt fuel subsidies that have drained currency reserves.

In an interview broadcast on Saturday, Riad Salameh said the government could resolve the problem quickly by passing the necessary legislation.

The American University of Beirut Medical Center said it was threatened with a forced shutdown as early as Monday because of shortages of fuel used to generate electricity.

“This means that ventilators and other lifesaving medical devices will cease to operate. Forty adult patients and 15 children living on respirators will die immediately,” the hospital said.

The central bank’s move to end subsidies will mean sharp price increases. It is the latest turn in a crisis that has sunk the Lebanese pound by 90 percent in less than two years and pushed more than half the population into poverty.

The central bank has effectively been subsidising fuel and other vital imports by providing dollars at exchange rates below the real price of the pound – most recently at 3,900 pounds to the dollar compared with parallel market rates above 20,000. This has eaten into a reserve which Salameh said now stood at $14bn.

To continue providing such support, the central bank has said it needs legislation to allow the use of the mandatory reserve, a portion of deposits that must be preserved by law.

“We are saying to everyone: You want to spend the mandatory reserve, we are ready, give us the law. It will take five minutes,” Salameh said.

‘Humiliation’

With the situation rapidly deteriorating, the army raided petrol stations on Saturday and seized fuel to distribute to desperate customers.

A statement said the military confiscated more than 78,000 litres of petrol stored at two filling stations as well as 57,000 litres of diesel from a third one.

Pictures and video footage posted by the army on its social media pages showing soldiers working pumps at gas stations and filling up car tanks.

An AFP correspondent said troops were deployed at several filling stations north of Beirut, where hundreds of vehicles were trapped in long queues to fill up on petrol.

The government has said fuel prices must not change. Fuel importers say they cannot import at market rates and sell at subsidised rates, and want clarity.

The central bank and oil authority told importers to sell their stocks at the subsidised rate of 3,900 pounds to the dollar, prioritising hospitals and other essential functions.

Related Articles

Back to top button