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The governor of the Central Bank of Lebanon stated that no one is running the country and will fight back after the government has criticized his decision. Stop fuel subsidies This has exhausted currency reserves.
Riad Salameh said in an interview broadcast on Saturday that the government can pass the necessary legislation to quickly resolve the problem.
He denied that he was acting alone in announcing the termination of subsidies on Wednesday, and said that it is well known that the decision is imminent.
“So far, you have no one in charge of this country,” Salame told Radio Free Lebanon.
The Lebanese army confiscated fuel from gas stations on Saturday to curb the hoarding of severe shortages.
The worsening fuel crisis is part of Lebanon’s broader financial crisis. Due to the exhaustion of fuel, hospitals, bakeries and many companies are reducing their operations or closing down.
Fatal violence broke out on the fuel pipeline this week. Protesters blocked roads and tank trucks were hijacked.
The American University Medical Center of Beirut said it faced the threat of being forced to shut down as early as Monday due to a shortage of fuel for power generation.
“This means that ventilators and other life-saving medical equipment will stop operating. 40 adult patients and 15 children living on ventilators will die immediately,” the hospital said.
The central bank’s move to end subsidies will mean a sharp rise in prices. This is the latest turning point in a crisis that devalued the Lebanese pound by 90% in less than two years and plunged more than half of the population into poverty.
The central bank effectively subsidized fuel and other important imports by offering dollars at an exchange rate lower than the actual price of the pound sterling-the most recent exchange rate was 3,900 pounds to the U.S. dollar, while the parallel market exchange rate was higher than 20,000 pounds. This has eroded the reserves that Salame said, which now stands at 14 billion U.S. dollars.
In order to continue to provide this support, the central bank stated that it needs to legislate to allow the use of mandatory reserves, which are part of the deposits that the law must keep.
“We said to everyone: You want to spend the mandatory reserve, we are ready, give us the law. It will take five minutes,” Salame said.
‘humiliation’
As the situation deteriorated rapidly, the army raided gas stations on Saturday and confiscated fuel for distribution to desperate customers.
A statement said that the military confiscated more than 78,000 liters of gasoline stored in two gas stations and 57,000 liters of diesel fuel stored in a third gas station.
The images and video clips posted by the army on its social media pages show soldiers working at gas stations and refueling car tanks.
An Agence France-Presse reporter said that troops were deployed at several gas stations north of Beirut, and hundreds of cars were trapped in long lines to refuel.
The government has stated that fuel prices cannot be changed. Fuel importers stated that they could not import at market prices and sell them at subsidized prices, and wanted to be clear.
The Central Bank and the Petroleum Administration told importers to sell their inventory at a subsidized price of £3,900 against the U.S. dollar, prioritizing hospitals and other basic functions.
Critics of the subsidy program say it encourages smuggling and hoarding by selling goods at a fraction of the actual price.
Salameh stated that the bank is obliged to provide funds to traders who have not brought their products to the market. The more than $800 million spent on fuel imports last month should have lasted for three months.
Salameh said there was no diesel, gasoline or electricity, adding: “This is a humiliation to the Lebanese.”
Since the resignation of Lebanese Prime Minister Hassan Diab after a fatal bombing at Beirut port in August last year, Lebanese politicians have failed to reach agreement on a new government. He continued to serve as the caretaker prime minister.
President Michel Aoun expressed optimism that the new government is about to be established.
Salameh stated that if a reform-conscious government comes to power, Lebanon may emerge from the crisis, adding that the pound sterling is “hostage to the formation of a new government and reforms.”
The government has stated that it must wait until the introduction of prepaid cash cards for the poor to end subsidies. Salameh said that Parliament approved these in June and was funded by a mandatory reserve fund, but it has not yet materialized.
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