Hezbollah Imports Iranian Fuel for Lebanon
September 15, 2021 | Claire Jungman and David Daoud
In August, Lebanon’s Central Bank Governor Riad Salameh announced an end to its fuel subsidies, which have drained the bank’s reserves since the country began descending into a financial crisis. The move, which was expected to cause already high fuel prices to quadruple, plunged Lebanon further into collapse. Shortly thereafter, the Lebanese government partially reversed Salameh’s decision, raising fuel prices by the comparatively low 66% instead, in a partial reduction of fuel subsidies. But this was only a partial fix, and a temporary one at that. The Lebanese government essentially had to borrow against its 2022 budget to continue this partial subsidization of fuel.
The detrimental impact of the rise in fuel prices has far-reaching implications for Lebanon. Long queues of customers are now regular sights at Lebanese gas stations, each waiting in line to fill up their gas tanks. Desperation has even resulted in killings over the increasingly scarce commodity. With no public transportation to speak of, fuel shortages have impacted unemployment rates, which are almost at 40 percent. The fuel shortage has also forced further cutbacks in Lebanon’s already-anemic supply of electricity. As a result, even hospitals have reduced their activities, and the country’s supply of potable water has also become jeopardized. Without electricity, supermarkets, restaurants, and private homes have been unable to store food, resulting in increased cases of food poisoning. Hospitals and the medical sector, which have already been forced to reduce their activities due to the electricity shortage, have been stretched to their breaking point.