Lebanon will reduce food subsidies and gradually increase gasoline prices due to the dwindling of foreign currency reserves, Lebanon’s caretaker finance minister said Tuesday.
Ghazi Wazni said that the Central Bank had $16 billion remaining in foreign reserves, of which only $1.5 billion could be used to finance subsidies.
Lebanon has been facing an unprecedented crisis with approximately 1.7 million people estimated to have fallen under the poverty line. Of these people, around 841,000 people will soon be under the food poverty line.
Wazni added that the amount remaining was only enough for a period of two to three months.
“Lebanon is no longer able to continue with the same pace of support, without giving a time frame for the changes. It costs $500 million a month, or $6 billion a year, which is why the government took a decision to rationalize and reduce subsidies of commodities,” Wazni said during an interview.
Wazni indicated that the government would remove some products, including some imported products and branded coffees, from the subsidized list in part because they are smuggled abroad to obtain profits.
“The government also plans to gradually increase prices at gas stations in the coming months, and reduce gasoline subsidies to 85 percent from 90 percent,” Wazni said.
Wazni noted that subsidies for wheat, medicine, and fuel to generate electricity were still in place for the time being.