Lebanon crisis

Lebanon raises gasoline prices by over 37 pct amid crippling shortages of supplies

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Lebanon’s energy ministry further raised gasoline prices on Friday by over 30 percent, an official document showed.

The price of 95-octane gasoline and 98-octane gasoline was raised by over 37 percent.

“This is the stage before last of lifting the subsidy,” said Georges Braks, a member of the Petrol Station Owners’ syndicate, who expects the subsidy to be removed by the end of September.

He said the new prices were based on an exchange rate around 12,000 pounds per dollar.

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This compares with a rate of 8,000 pounds per dollar that the previous government agreed for fuel prices last month, but is still below the rate on the parallel market, where dollars were changing hands at 14,600 on Friday.

The central bank said last month it could no longer afford to provide dollars for fuel at heavily subsidized rates.

The petrol price hike means importers will still be sourcing dollars from the central bank rather than the market and so a subsidy still applies, said Mike Azar, a senior Beirut-based financial advisor.

On Thursday, Lebanon’s cabinet approved a policy program that aims to tackle one of the worst financial meltdowns in history.

Reuters saw the draft document, which included a resumption of negotiations with the International Monetary Fund and a restructuring of the banking sector.

Meanwhile, Iran-backed Hezbollah began bringing Iranian fuel into Lebanon via Syria on Thursday, a move the Shia group says aims to ease a crippling energy crisis but which its opponents have said exposes the country to the risk of US sanctions.

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