Lebanon’s President Michel Aoun summoned the governor of the Lebanese central bank, Riad Salameh, after his decision to considerably cut fuel subsidies.
As the central bank’s foreign currency reserves touched a critical point, Lebanese Prime Minister Hassan Diab gave an “exceptional approval” on June 25 to partially lift subsidies by financing fuel imports at the exchange rate of 3,900 Lebanese pounds to the dollar “for the next three months,” to little effect.
The Central Bank governor announced late on Wednesday that fuel imports would no longer be subsidized at the rate of 3,900 Lebanese pounds to the dollar. By Thursday, the price of petrol at some outlets outside Beirut had already risen five-fold.
The decision to lift fuel subsidies had been on the cards for months, although its announcement prompted angry responses, with protesters storming one of the country’s main power plants in Zahrani.
Hassan Diab described the cut as illegal and called for an emergency cabinet meeting on Thursday.
“The governor of the Banque du Liban has taken the decision to lift subsidies, which is against the law, and also does not take into account the reality of the deep living and social crisis,” he said.
Lebanon is in the midst of an economic and political crisis aggravated by the COVID-19 pandemic and the Beirut port explosion, the latter of which was recently mourned in its first anniversary on August 4.