Lebanese PM Diab says most subsidies to only sustain until June

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Most Lebanese subsidies are covered until June but fuel for electricity generation will run out by the end of March and efforts are being made to keep it going, Caretaker Prime Minister Hassan Diab said on Tuesday.

Diab’s government has been serving in a caretaker capacity since it resigned after the August 4 Beirut port blast that destroyed large parts of the capital and killed 200 people.

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“Right now the fuel for the electricity company can last until end-March, but we are making efforts to secure new credit lines to cover needs,” Diab told Reuters.

Lebanon is in the throes of a financial crisis that is posing the biggest threat to its stability since the 1975-1990 civil war.

As dollar inflows dried up, the central bank has drawn on foreign reserves to subsidize three key commodities - wheat, fuel and medicine - and some basic goods.

Diab told Reuters in December the country could ration reserves left for subsidies to last six months.

“We had feared and warned before of the consequences of continuing to drain reserves,” he said on Tuesday, adding that he had sent several suggestions for rationing subsidies to parliament since December.

“But no decision has been taken so far,” he said.

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