Anger in Lebanon over central bank ending of fuel subsidies

Aug 11, 2021, 3:15 PM | Updated: Aug 12, 2021, 12:11 pm

BEIRUT (AP) — Protesters closed roads in different parts of Lebanon on Thursday, angry over the central bank’s decision to end subsidies for fuel products. The decision was likely to lead to a hike in prices of almost all commodities amid a paralyzing economic crisis.

Outgoing Prime Minister Hassan Diab described the decision by the central bank’s governor as “irresponsible” and illegal. His government later pledged to keep the subsidies.

Many petrol stations were closed Thursday, with some experts predicting fuel prices would increase fivefold.

Several major roads were closed by angry protesters. In the southern village of Zahrani, a motorist trying to plow through protesters, drove over one person and seriously injured him, the state news agency reported.

The move to end subsidies had been anticipated for months as the bank’s reserves dry up, but on Thursday politicians distanced themselves, and criticized the central bank’s governor, Riad Salameh.

Diab, whose government has rarely held meetings since its resignation a year ago, was quoted as saying that he was taken by surprise by Salameh’s decision. His Cabinet, which acts in caretaker capacity, said it will not adopt new prices necessary to translate the central bank’s decision into policy until a full program for lifting subsidies, including ration cards, is approved. This signaled a standoff that is likely to deepen the fuel crisis.

The central bank’s decision, announced late Wednesday, came hours after a meeting attended by the president, and senior government and security officials in which they were reportedly told by the central bank governor that he can no longer maintain subsidies of fuel imports. Diab did not attend that meeting, saying he was in isolation because he had earlier met a person who tested positive for coronavirus.

It remained unclear how the caretaker government would continue the subsidies if the central bank does not open credit lines for new fuel supplies. Diab’s government said gas stations will have to continue selling gasoline and diesel in the coming days at subsidized prices. It also lashed out at the central bank and the governor, saying that they “will be responsible for the catastrophic consequences of their unilateral decision.”

The central bank on Thursday reiterated its decision, saying subsidies over the past weeks have only helped businessmen, not people in need. Despite subsidies worth $800 million in July alone, fuel products remained scarce in the market, it added.

The shortages are blamed on smuggling, hoarding and the cash-strapped government’s inability to secure deliveries of imported fuel.

In June, the parliament approved giving half a million poor families an amount in dollars for a period of one year. It is not yet clear how the estimated $556 million project, which aims to replace the subsidy system, would be financed. Diab’s office pledged the mechanism was being worked out and would be implemented soon.

The central bank’s move may ease some of the shortages but it is likely to heighten tensions in the small Mideast country where over half the population has fallen below the poverty line. The financial crisis — rooted in years of corruption and mismanagement — took hold in 2019.

It has been made worse by the failure of political leaders to agree on a new government to chart a path out of the crisis and negotiate a recovery package with the International Monetary Fund. Diab’s caretaker government has remained in charge.

The fuel crisis has turned violent before, with motorists clashing at gas stations after long waits and fuel running out. On Monday, gunshots and violence at gas stations killed at least three people.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


FILE - Democratic presidential hopeful, Sen. Barack Obama D-Ill., celebrates with his supporters af...
Associated Press

Iowa caucuses, built on myth, lose place at head of the line

DES MOINES, Iowa (AP) — The Hy-Vee Hall ballroom in Des Moines erupted in cheers in 2008 when the youthful Illinois senator hinted at the improbable possibility of the feat ahead: “Our time for change has come!” That Iowa, an overwhelmingly white state, would propel Barack Obama’s rise to become America’s first Black president seemed […]
1 day ago
FILE - Former President Donald Trump, left, and Michigan Republican attorney general candidate Matt...
Associated Press

Defeated election conspiracists seek to lead Michigan GOP

LANSING, Mich. (AP) — The Republicans who lost their races for Michigan’s top three statewide offices after promoting falsehoods about the 2020 presidential election are not planning to go quietly. Two of the candidates who denied President Joe Biden’s victory in the state have announced plans to run for the position that leads the state […]
1 day ago
Associated Press

Estonia to buy U.S. rocket artillery system in $200M deal

HELSINKI (AP) — NATO member and Russia’s neighbor Estonia is boosting its defense capabilities by acquiring an advanced U.S. rocket artillery system in the Baltic country’s largest arms procurement project ever, defense officials said Saturday. A deal signed Friday for the High Mobility Artillery Rocket System is worth more than $200 million and includes equipment […]
1 day ago
Associated Press

Strong quake shakes main Indonesia island; no tsunami alert

JAKARTA, Indonesia (AP) — A strong earthquake shook parts of Indonesia’s main island of Java on Saturday, causing panic and sending people into the streets, but there were no immediate reports of casualties. Officials said there was no danger of a tsunami. The U.S. Geological Survey measured the quake at magnitude 5.7 and said it […]
1 day ago
Migrant workers with their belongings leave a barricaded village after authorities' easing of COVID...
Associated Press

Beijing, Shenzhen scrap COVID-19 tests for public transport

BEIJING (AP) — Chinese authorities on Saturday announced a further easing of COVID-19 curbs with major cities such as Shenzhen and Beijing no longer requiring negative tests to take public transport. The slight relaxation of testing requirements comes even as daily virus infections reach near-record highs, and follows weekend protests across the country by residents […]
1 day ago
FILE - A protester holding flowers is confronted by a policeman during a protest on a street in Sha...
Associated Press

At Shanghai vigil, bold shout for change preceded crackdown

SHANGHAI (AP) — The mourners in Shanghai lit candles and placed flowers. Someone scrawled “Urumqi, 11.24, Rest in Peace” in red on cardboard — referring to the deadly apartment fire in China’s western city of Urumqi that sparked anger over perceptions the country’s strict COVID-19 measures played a role in the disaster. What started as […]
1 day ago

Sponsored Articles

Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Anger in Lebanon over central bank ending of fuel subsidies