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Lebanon can no longer subsidize fuel purchases: Central bank governor

Published: Updated:

Lebanese central bank governor Riad Salameh said on Wednesday he could no longer open lines of credit for fuel imports or subsidize its purchase, Lebanon’s al-Jadeed TV quoted him as saying in a meeting of the Supreme Defense Council.

Reuters could not immediately reach Salameh for comment on his remarks during a meeting of the Supreme Defence Council.

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Lebanon is suffering crippling fuel shortages as a result of a financial crisis that has sunk the Lebanese pound by more than 90 percent against the dollar in less than two years.

Since the onset of the crisis, the central bank has been using its dollar reserves to finance fuel imports at official exchange rates that have been well below the price at which dollars have been changing hands on the parallel market.

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

Dollars were changing hands at around 20,000 pounds on the parallel market on Wednesday.

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