Subsidy For Commodities In Lebanon Might Be Replaced With Coupons

Lebanese Gov't Considers Removing Bread Subsidy, Handing Out Coupons
Akhbar Alaan

The Lebanese government might remove its subsidy for bread and combustibles in the coming months and distribute coupons instead to compensate for the resulting high prices, Al-Akhbar reported.

Prime Minister Hassan Diab is reportedly working with the Ministry of Economy on a proposal to cancel the government’s subsidy for bread, diesel fuel, gasoline, and (cooking) gas.

This basically means that the prices of said commodities will no longer be linked to the official exchange rate of the Lebanese pound against the dollar (approximately 1,515) but to the high rate of the parallel market.

In other words, the prices of these commodities will, at the very least, double when this proposal takes effect, which may happen very soon.

Notably, Economy Minister Raoul Nehme did indicate that the current form of the proposal is still a preliminary one that needs to be studied and debated more.

However, Al-Akhbar, which secured a copy, said it points towards a first-of-August implementation.

As for the motives behind this proposal, the copy says that the government can “no longer remain indifferent to the tragic reality” that is the number of families living below the poverty line, which has risen to 335,000.

For this reason, the suggested removal of the subsidy will be accompanied by a social care program that especially benefits the more vulnerable citizens.

The program involves systematically handing out coupons to people, in Lebanese pounds, to fill the painful gap between the official and non-official exchange rates.

Reportedly, the distribution of these coupons will depend on the individual conditions and requirements of each receiver.

Coupons for gasoline will be distributed, for example, to taxi drivers according to the type of vehicle they drive, their mileage, which will later become determinable using GPS, in addition to other factors.

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Cooking gas coupons, on the other hand, will be given out according to the number of members in the receiving family.

It remains that the removal of subsidies will also make it harder than it’s already on the general population.

Many and not a few are “newly impoverished” by the economic crisis, and most are suffering already from it. These are not registered as “vulnerable.”

Considering that Lebanon’s population is 6.849 million, how will the government handle that increased pressure on the vast majority?