Lebanon Puts End to Fuel Subsidies

Banque du Liban Governor Riad Salameh said on Wednesday that the bank can no longer support fuel imports, putting an end to its subsidy, a ministerial source said to Reuters.

The government raised fuel prices in June after the bank began extending fuel lines of credit at 3,900 liras to the dollar, more than the official rate of 1,500 liras, still well below the parallel market rate.

The dollar was trading at about 20,000 LBP on the black market on Wednesday.

Lebanon suffers from severe fuel shortages as a result of the financial crisis that has plunged the Lebanese lira by more than 90% against the U.S. dollar.

Since the beginning of the crisis, the central bank has been using its dollar reserves to finance fuel imports at official exchange rates that were much lower than the rate at which dollars are traded on the black market.