Background
Since Lebanon witnessed a major uprising in October 2019, fuel prices have increased dramatically. Lebanon is experiencing an overwhelming financial meltdown with the local currency continuing to lose its value by the day and the fear of a total blackout persistently haunts Lebanon’s residents.
Basic needs such as medicine are becoming harder to find and fuel is becoming even scarcer, with endless queues of cars lining up in front of gas stations. Smuggling has also become rampant across the border to Syria, as trucks filled with subsidized fuel are selling gas in Syria at a higher rate than they would in Lebanon.
The Black Market
The Syrian economy is also in need of fuel and Lebanese smugglers are taking advantage of the situation by supplying subsidized gas in return for a fruitful profit of roughly 16$ per tank.
Fuel, which is subsidized by the central bank, has opened the door for more illegal smuggling at the expense of the Lebanese people who wonder when they can fill their car next. Although this is not a sustainable way of living, it provides relief for people neglected by their own government.
Just before mass protests broke out in October 2019, prices for octane 95 gas cost around 23,500L.L. Now, fuel prices are around 71,600 L.L.Meanwhile, Gas in Syria costs 5 times more than in Lebanon with it being priced at around 3000 SYP per liter. Fuel smuggling will surely continue as the Lebanese know that they can sell gas to Syria for a much higher markup and generate much needed income given the economic collapse.
Dangerous Solution
Lebanon’s central bank allocates roughly 1billion per year for fuel imports while BDL’s total reserves are estimated at 15 billion. With no clear end in sight for the petrol crisis, the Iran-backed militia and political party, Hezbollah, have come up with their own solution to combat the situation. In order to ease the gas crisis in Lebanon, Its leader Hassan Nasrallah has proposed to import fuel from Iran. This raised concern among many since Iran is prohibited from selling oil and sanctions could be slapped on Lebanon if Hezbollah chooses to go down this route. This proposition has the potential to further isolate Lebanon from the international community and worsen the already dire situation.
Teymour Nsouli – has written extensively on Middle Eastern affairs and has had many articles published on a variety of platforms.
