| 3 February 2023, Friday |

Gasoline imports will lead to a spike in dollar exchange rate

Whenever the gasoline crisis is resolved it reappears, as after lifting subsidies on fuel the prices are rising on weekly basis, reaching 308,500 LBP for a canister of gasoline, 292,000 LBP for diesel and 251,000 LBP for a cooking gas bottle.

The Central Bank has asked importing companies to secure 10 percent of the value of the fuels they import in cash dollars and 90 percent in LBP.

Although this measure will not impose additional financial burdens on the companies, because the 10 percent is calculated according to exchange rate of 21,000 LBP, but it will lead to more pressure on the dollar exchange rate on the black market because importing companies will resort to money dealers to secure those dollars.

The government aims to increase treasury revenues by raising the customs dollar and not calculating it anymore on the official exchange rate. What are the repercussions of that step on the economy, and on the consumer?

Prime Minister Najib Mikati announced, during the dialogue meeting held at the Economic and Social Council, that in the first Cabinet session he will raise the customs dollar from 1,500 LBP to about 12,000 LBP, according to information. In order to increase state revenues, finance social assistance for public sector employees, raise transportation allowance and other additional spending.

But what are the advantages of raising the customs dollar, and is it a necessity today?

Customs duties vary according to the country of origin, and range from 5 to 25 percent, but goods imported from Arab countries (in compliance with Great Arab Free Trade Agreement) and from the European Union, are exempted from customs duties. As for the imports of the rest of the world, such as Turkey, China and the United States, which is one of the largest exporters to Lebanon, its imports are subject to customs duties, and therefore the prices of all goods imported from these countries will rise, knowing that most of them are considered luxuries.

Will the customs dollar be raised within a deliberate policy that ensures that the prices of basic commodities do not rise and does not lead to a further deterioration in the purchasing power of the citizen?

  • Sawt Beirut International