Lebanese caretaker Energy Minister Raymond Ghajar urged the Lebanese to prepare for the inevitable end of the Central Bank‘s fuel subsidy.
Speaking to the press after a meeting of the Public Works, Transport, Energy, and Water Committee on Thursday, Ghajar affirmed that Lebanon has “a big problem” in the availability of fuel.
The amounts of fuel being imported in Lebanon are insufficient, Ghajar said, because of people’s conviction that “we are on the verge of lifting subsidies” and the resulting nationwide hoarding of gasoline.
The subsidy of essential commodities has been a major topic of debate in the Lebanese political scene.
The most popular proposed alternative for the subsidy mechanism is the ration card project that is currently being studied by the authorities.
“We are all afraid that the subsidy will be removed, but the subsidy is still there. However, the ability of the Banque du Liban to subsidize, in the way and at the speed which it had been previously, will stop,” Ghajar said.
“When [the ration card] is approved in Parliament after a month or two or three, the Banque du Liban will be ready to continue subsidizing, but in a smaller way.”
Ghajar emphasized that fuel prices will inevitably go up. On the flip side, he said, “raising prices might reduce hoarding, smuggling, and monopoly.”
“The main goal is that we have to get accustomed and accept that this subsidy that we’ve benefited from for a year and a half – and, perhaps, in the years before, without knowing – will end, and when that happens, people must be ready,” he added.
When that happens, able individuals will have to pay for the “real price” of commodities. As for the people who need support, “the ration card solves the problem,” he explained.
The official then stressed that people will not be able to operate on loss.
“This issue is economic. People cannot work at a loss, and the person who cannot pay the price of the canister at the price of 200,000 [Lebanese pounds] will stop using the car and will use something else.”
“… Instead of stopping suddenly [when the subsidy is lifted], we will prepare ourselves and prepare the ration card, and there are mechanisms for this card, especially for people who will be affected,” Ghajar concluded.