| 24 April 2024, Wednesday |

If subsidies were lifted, gasoline tank price will reach 150,000 LBP

In the midst of the political and economic crisis which is escalating every day, citizens are the sole losers, as they wake up every day on new dollar exchange rates on the black market, new gasoline prices and rumors of lifting subsidies, while the officials and leaders are struggling to gain more equities and ministries.

With the recent talks of lifting subsidies on fuel oil, and the scene of car queues in front of gas stations, the “International Information” has published an study titled: “If subsidies were lifted, global prices steady, and the dollar fixed at 13,000 LBP, the gasoline tank will reach 150,000 pounds.”

Lifting subsidies on gasoline is panicking the majority of citizens. In light of the absence of a descent public transportation, private cars become a necessity for transportation rather than a luxury.

The study added that certainly the total or partial removal of subsidies will lead to a significant increase in the price of gasoline, which have witnessed a surge in prices before the subsidies were lifted.

Lebanon imports its needs from 98- and 95-octane gasoline through private companies, and the imported quantities and prices have decreased in 2020 compared to 2019 as a result of the closures taking place in Lebanon and also the drop in global prices.

Consumption have dropped 13 percent in 2020 compared to its previous year from 119 million tanks to 103.4 million tanks. In terms of value, and as a result of the global decline in prices, imports dropped 38 percent from $1.3 billion in 2019 to $ 827 million in 2020.

When global gasoline prices decreased, during March, April and May 2020, the government intended to increase the customs fee and the domestic consumption fee, which have rose from 5,060 LBP per tank  to 12,630 LBP, and when global prices rose, the fees were reduced.

Although subsidies were not lifted, the price of the gasoline tank increased from May 2020 to May 2021 from 23,500 LBP to 39,700 LBP. The reason behind this rise is an increase in value of the unsupported 10 percent from 4,000 LBP to 10,800 LBP, and the global price increase from 5,180 LBP to  16,070 LBP.

As a result of the above, if the subsidies were lifted, global prices remain stable, and the dollar exchange rate is steady at 13,000 LBP, the price of gasoline may reach about 151,000 LBP.

  • Sawt Beirut International