Lebanon's fuel quandary: Unpacking the 2024 budget impact

Report by Ghida Fayad, English adaptation by Karine Keuchkerian

 

Is there a new fuel crisis on the horizon? This is the question that Lebanese people have been asking for hours.

So, what is the actual problem?

The problem lies in the issuance of the 2024 budget, which includes imposing an exceptional fine or tax of 10 percent on all traders, institutions, and companies that benefited from the subsidy of various essential commodities provided by Banque du Liban (BDL) during the tenure of former Prime Minister Hassan Diab's government.

To recall, the subsidy policy cost approximately $14 billion of depositors' money.

Oil importing companies argue that any retroactive decision is illegal, and it is unfair for them to bear the burden of this tax.

However, these companies had imported significant quantities of diesel and gasoline during the "subsidy" period.

In 2020, these companies imported 5,549,419 tons of diesel. After the support was canceled, the imported quantity decreased by 68 percent, reaching 1,769,002 tons in 2023.

In 2020, the companies also imported 1,837,648 tons of gasoline. Gradually, after the support was discontinued, this quantity decreased by 45 percent, reaching 1,018,342 tons of imported gasoline in 2023.
 
Thus, $14 billion was spent on the subsidy policy from depositors' money. Isn't it time to reclaim these funds?