Lebanese troops deploy to gas stations after bank chief stopped fuel subsidies

On Saturday, the Lebanese army raided service stations and seized gasoline to curb the hoarding as the central bank chief stood firm in his decision to stop fuel subsidies.

Lebanon is trapped by one of the world’s worst economic crises since the 1850s, according to the World Bank, and is battling fuel, bread and medicine shortages.

On Wednesday, central bank chief Riad Salameh said he would halt state subsidies on fuel imports to ease pressure on the bank’s dwindling foreign reserves, sparking panic across the country.

On Saturday Salameh insisted that he would not back down on his decision without a parliamentary vote, saying foreign exchange reserves had fallen to $ 14 billion.

“I will not review the elimination of fuel subsidies unless the use of mandatory reserves is legalized” by a parliamentary vote, he told local radio.

The Lebanese pound has lost more than 90 percent of its black market value and 78 percent of the population lives below the poverty line.

Crippling fuel shortages and power outages lasting more than 22 hours a day have left many businesses and households without the diesel needed to power private generators, plunging the country into darkness.

They have also sparked giant lines at gas stations that are rationing gasoline supplies, allegedly due to lack of stocks.

Fuel importers blame the crisis on a delay by the central bank in opening credit lines to finance imports.

Salameh denied those charges on Saturday, accusing importers and distributors of withholding the fuel to sell it at higher prices on the black market or across the border in Syria.

“Importers are to blame,” Salameh said, accusing them of wasting $ 820 million that the lender had faced during three months of imports.

The army deploys

To stop the hoarding, the military said Saturday it was raiding closed gas stations to seize gasoline and distribute it “for free” to people.

He shared images and videos on his social media pages showing soldiers working bombs at gas stations and filling car tanks.

An AFP correspondent saw soldiers deployed at various gas stations north of Beirut, where hundreds of vehicles had been queuing for long hours to refuel.

Video footage posted online showed motorists cheering as the military raided gas stations.

But some Lebanese remained bitter.

“The army’s decision is too late,” said a motorist who had been waiting for hours in the boiling heat.

After the deployment of the army, many gas stations across the country reopened after closing for several days.

Police also announced Saturday that they would dispatch patrols to gas stations believed to be stockpiling fuel and will confiscate it.

Political crisis

Central bank financing of imports of fuels and other commodities has helped foreign reserves fall more than 50 percent from their pre-crisis level of more than $ 30 billion.

Salameh blamed the Lebanese ruling class for the crisis.

“Everybody knew … they knew in government, parliament and the president’s office” that the reserves were critically low, Salameh said, accusing them of inaction.

Salameh has run the central bank since 1993 and many Lebanese suspect that he helped facilitate large money transfers abroad by the political elite during mass protests that began in October 2019.

He is under judicial investigation in Lebanon, Switzerland and France for various cases, including the diversion of public funds and illicit enrichment.

At home, many blame him for capital controls in place since 2019 that have trapped dollar savings and denied even the poorest segment of the population free access to their deposits.

But Salameh blamed politicians who failed to agree on a new government more than a year since acting Prime Minister Hassan Diab resigned in the wake of a monstrous explosion in the port of Beirut.

International donors who have pledged millions in humanitarian aid to Lebanon have made assistance conditional on the formation of a new government that can spearhead reforms and resume negotiations with the International Monetary Fund.

(AFP)

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