Lebanon Army Deploys at Pumps as Bank Chief Firm on Ending Fuel Subsidies

Lebanon's army has deployed at gas stations to stop fuel hoarding in the country after the central bank's decision to stop fuel subsidies sparked panic in the crisis-hit country ANWAR AMRO AFP
Lebanon's army has deployed at gas stations to stop fuel hoarding in the country after the central bank's decision to stop fuel subsidies sparked panic in the crisis-hit country ANWAR AMRO AFP

Lebanon's army seized fuel from gas stations on Saturday to curb hoarding amid crippling shortages; as the central bank chief stood firm on his decision to scrap fuel subsidies.

Compounding the country's crisis; a top private hospital said it may have to close due to power outages caused by shortages of diesel; warning this could cause hundreds of deaths.

Lebanon is grappling with a financial crisis branded by the World Bank as one of the planet's worst since the 1850s.

Foreign currency reserves are fast depleting; forcing the central bank to scale down funding for imports in an effort to shore up the little money Lebanon has left.

The Lebanese pound has lost more than 90 percent of its value on the black market; and further 78 percent of the population lives below the poverty line.

On Wednesday central bank chief Riad Salameh said he would scrap fuel subsidies to ease pressure on fast-depleting foreign reserves.

His decision sparked panic; with huge queues forming outside bakeries and petrol stations as Lebanese struggled to stock up.

Salameh told a radio station Saturday he would not back down.

"I will not review the removal of subsidies on fuel unless the use of compulsory reserves is legalized;" by a parliamentary vote; he said.

Businesses closure

Fuel shortages have left many with just two hours of electricity a day; forcing the closure of businesses.

Warning of "imminent disaster"; the American University of Beirut Medical Center said it would have to cease operations within 48 hours.

Without fuel; "forty adult patients and also fifteen children living on respirators also will die immediately;" it said in a statement.

"One hundred and eighty people suffering from renal failure will die poisoned after a few days… Hundreds of cancer patients; adults and children; will die in subsequent weeks."

Credit lines

Fuel importers blame the crisis on delays by the central bank in opening credit lines to fund imports.

Salameh on Saturday accused importers and distributors of hoarding fuel to sell at higher prices on the black market; or across the border in Syria.

With the situation rapidly deteriorating; the army raided gas stations on Saturday and further seized fuel to distribute to desperate customers.

A statement said the military had confiscated more than 78;000 litres of gasoline stored at two gas stations as well as 57;000 litres of diesel fuel from a third one.

Internal Security Forces also said they had seized thousands of litres of petrol and diesel fuel stockpiled at one gas pump.

Pictures and video footage posted by the army on its social media pages markedly showed soldiers working pumps at gas stations and filling up car tanks.

An AFP correspondent said troops were deployed at several gas stations north of Beirut; where hundreds of vehicles were trapped in long queues to fill up on petrol.

Video footage posted online showed motorists cheering as the army raided gas stations.

Later; many petrol stations across the country which had been closed claiming they had no fuel; reopened.

But some Lebanese remained bitter.

"The army's decision is too late;" said one motorist who also had been waiting for hours in the scorching heat.

– Political crisis –

The central bank's funding of fuel and other basic commodity imports has contributed to foreign reserves falling by more than 50 percent from their pre-crisis level of more than $30 billion.

Salameh said inaction by politicians had led Lebanon to breaking point.

"Everybody was aware… they were aware in government; parliament and also the president's office" that reserves were falling; he said.

Salameh has headed the central bank since 1993 and is suspected by many Lebanese of helping facilitate large transfers of money abroad by the political elite during mass protests that began in October 2019.

He is under judicial investigation in Lebanon; Switzerland and France over several cases; including diversion of public funds and illicit enrichment.

At home; many blame him for capital controls in place since 2019 that have trapped dollar savings and further denied even the poorest segment of the population full access to their deposits.

Political wrangling over a new government has added to Lebanon's dire situation.

The last cabinet resigned amid public outrage following last August's monster explosion at Beirut port that killed more than 200 people.

International donors have pledged hundreds of millions of dollars in humanitarian aid to Lebanon.

But the aid is conditional on the formation of a new government prepared to spearhead reforms; and on the resumption of talks with the International Monetary Fund.

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