A street is empty after taxis block streets during a protest against the raise of petrol prices in Beirut, Lebanon, on Monday. Photo by Nabil Mounzer/EPA-EFE
BEIRUT, Lebanon, Oct. 26 (UPI) — A new spike in fuel prices — spurred by the inability of the central bank to provide hard currency for fuel imports, the national currency in free-fall again and the rise in global oil prices — could bring Lebanon to a standstill.
The fuel crisis that peaked over the summer has not ended, only increasing the suffering of a population drained by the severe economic crisis that started in October 2019.
Petrol prices hit record highs on Wednesday, when the energy ministry increased the cost of 20 liters (5 gallons) of 95-octane and 98-octane gasoline by 30 percent. It now costs 302,700 Lebanese pounds ($14.76) and 312,700 LL ($15.25) respectively, compared to an average of 60,000 LL ($2.93) in June.
The price of one bottle of cooking gas jumped to more than 280,000 LL ($13.65) while 1 ton of diesel fuel is priced at $570, paid in hard currency or the equivalent in Lebanese pounds at the black market rate. One U.S. dollar is being traded at around 20,500 LL.
Diesel fuel is essential to run private generators for homes, hospitals, factories and businesses as the state electric company is unable to provide more than two to four hours of power supply per day.
Unaffordable food, transportation
The fuel price hike is also affecting the cost of services, leading to a new increase in food prices and transportation fees that the majority of the population can no longer afford.
Going to work or school has become an ordeal beyond the means of many. While using one’s car has become so expensive, relying on available public transportation, mainly provided by taxis or shared taxis (known as “service”) and small vans, is no more a cheap option.
Elham, a 64-year-old cleaning lady at a bank in Beirut who declined to give her last name, pays more than one-third of her 750,000 LL monthly salary (around $36 at black market rate) just to get to work.
She lives in Sin el-Fil, a suburb in east Beirut, and uses the mini-bus, the cheapest available transportation means.
“It costs me 16,000 LL [78 cents] a day… and after paying my 500,000 LL [$24] monthly rent, nothing is left for my other expenses,” Elham told UPI. “How can I live on such a salary?”+
She is among the lucky ones who got some help from a charity organization, but she is afraid that such assistance won’t last. Her married children are providing her with a cooked meal every day. However, she still needs to buy her blood pressure medications, pay for her generator subscription fees and cooking gas and some fruit whenever possible.
Carpooling is gaining popularity, especially among students and employees living outside Beirut. More people are seen using their bikes or motorcycles. Donkeys emerged as an option and replaced the school bus. A video widely circulated on social media in recent days showed two men and their five children riding two donkeys, purportedly in the eastern Bekaa region, to get to school.
Catastrophic for workers
Bechara al-Asmar, head of the general confederation of Lebanese workers, said the fuel price hike has “catastrophic implications” for the country’s estimated 1 million workers, including 275,000 employees in the public sector.
“Those 1 million workers are directly affected by the skyrocketing fuel price increase,” al-Asmar told UPI, referring to the subsequent price increases of bread, essential food items, generator subscriptions, medical services and transportation.
He noted that a 5-ampere generator subscription, barely enough to keep some lights on and refrigerator running, now costs 1.5 million LL ($73), meaning “more than double the minimum wage of 675,000 LL” ($33).
Circulating inside Beirut has become a luxury after shared taxi one-way fare jumped to 30,000 LL ($1.46) . The drive from the northern city of Tripoli to Beirut now costs 75,000 LL ($3.66). Thus, the number of employees failing to show up at work is on the rise.
“The number of absentees, especially among public sector employees, is growing and greatly affecting public services and thus government revenues,” al-Asmar explained. “Even those who managed to get to work, they are most of the time unable to perform their duties properly because of the severe power cuts and lack of diesel fuel to power their generators.”
The general confederation of Lebanese workers has been engaged in talks with the government to raise the monthly minimum wage to 7 million LL ($341), adjust salary scales and increase transportation allowances. It is unlikely that the cash-strapped government could meet such demands.
According to al-Asmar, 350,000 workers became jobless since the start of the crisis two years ago. Some 225,000 university graduates haven’t been able to secure a job within the past three years, which also witnessed the exodus of some 400,000 people. Sixty percent of the population are living below the poverty line, while 90 percent suffer “from dangerous economic conditions.”
Political consensus needed
Fixing the fuel price and the exchange rate to the U.S. dollar is a must for any solution which “starts with a political consensus,” he said, referring to “dangerous divisions” among the political leaders “almost over everything.”
Lebanon’s political leaders, in power since the end of the 1975-90 civil war, have been widely accused of corruption and mismanagement that led to the country’s compounded crises and collapse of most sectors of society. They remained unmoved by the sufferings of the Lebanese people, who are battling hunger and deep poverty after their national currency lost more than 90 percent of its value.
“We are heading toward more collapses, more poverty and more people migrating…and so, we will see social chaos, popular uprising and anger in the streets,” said economist Elie Yashoui, who blamed the country’s collapse on “the highly mismanaged” monetary, fiscal, investment, public service and infrastructure project policies applied by all the successive governments since 1993.
Yashoui said tens of billions U.S. dollars have been spent on infrastructure projects, such electricity and water, since the end of the civil war to no avail.
“We are facing the highest degree of corruption… All the money that will come from the IMF, estimated at some $2 billion, or any other assistance will barely make up for the $120 billion bank deposits that were lost,” he told UPI of the International Monetary Fund. “A whole population was robbed…the Lebanese have become hostages of this diabolic and corrupt political class.”
Lebanon, he said, is the responsibility of the international community, which should “set up a special court to try those politicians and save the country.”