Power Struggle over Fuel Ships: Financial, Technical, and Political Dimensions

The tug-of-war returns to the fuel ships for electricity. Its apparent dimensions are financial and technical, but are there political backgrounds to the issue?

Under the decrees approved at the beginning of the year for a value of $300 million, the Ministry of Energy requested the purchase of a quantity of gas oil as part of the plan to revitalize the electricity sector and increase power supply hours.

Sources say they obtained the necessary approvals, including opening a documentary credit for $58 million by the Ministry of Finance. Therefore, a quantity of 66,000 tons was purchased after a transparent tender with the approval of the Public Procurement Authority, which was awarded to Coral Energy DMCC.

Half of the quantity has been sent on a ship that arrived at the Zahranieh shore, opposite the power plant, and is awaiting unloading after the signing of the documentary credit. Therefore, the required approval for payment of $29 million is needed after six months from today.

Sources from the Ministry of Energy indicate that what they are doing is legal, and there is a remaining amount of $107 million from the $300 million loan approved by the government. What they want is to disburse a portion of it. If that is refused, they suggest transferring the amount allocated to Electricité du Liban in Lebanese pounds from its account at the central bank to dollars for payment to the ship, which exceeds $40 million.

But why purchase additional fuel when the Zahranieh and Deir Ammar tanks are full?

Ministry sources respond that implementing the plan requires increasing power supply hours, which is what they do. In addition to Iraqi fuel, other sources approved by the government must be utilized. Furthermore, revenues are increasing, and financial balance is being achieved. So, why complicate matters?

The ministry understands the new central bank governor's goals. Still, it wants to proceed with what was agreed upon during Salameh's tenure. If he wants to adopt a new approach, he should start it after implementing what was agreed upon.

According to central bank sources, converting the funds in the electricity account from Lebanese pounds to dollars would hurt the national currency and the exchange market. In that case, the state, the electricity establishment, and even state employees would lose. While the sources reiterate that monetary stability is their primary goal, any attempt to convert part of the electricity funds into dollars should be based on this premise.

The central bank is eager to cooperate within the available possibilities and among the government's priorities and does not want any dispute with anyone.

It was expected that the Minister of Energy would return to the ministerial electricity committee before making any decision, government circles say. Did he do that, and if he did, did he consider how to secure financing without putting any pressure on the pound? This matter is no less important than the first.

In any case, the ministerial electricity committee will meet on Monday and discuss each incident.