Lebanon’s central bank will no longer be able to subsidise fuel purchases, the bank's governor informed the Higher Defence Council on Wednesday.
The decision will further endanger the country's fragile electricity supply, said caretaker Energy Minister Raymond Ghajar.
Lebanon’s worst-ever financial crisis, which began in 2019, has brought the already crumbling electricity sector to the brink of collapse. The country’s state-run electricity company, Electricité du Liban, provides about two hours of electricity a day, down from around 21 hours daily in Beirut before the crisis.
Private generators, which normally kick in when the EDL-supplied power is off, cannot purchase enough diesel fuel.
Shortages have caused massive traffic jams as people queue for hours to fill up their petrol tanks.
On Wednesday, restaurants closed their doors in the coastal city of Saida as generators were no longer able to function, and hospitals have told The National that they are in danger of closure.
“The governor of the central bank, Riad Salameh, told the Higher Defence Council that he can no longer support the purchase of fuel,” the state-run National News Agency quoted Mr Ghajar as saying.
Mr Ghajar did not specify when the subsidies would end. The Council, which is headed by President Michel Aoun, does not usually provide details of meetings, but confirmed in a statement that attendees, which included caretaker ministers and Mr Salameh, discussed Lebanon’s fuel crisis.
Lebanon is currently seeing peak demand for electricity amid the summer heat and needs 3,000 megawatts, but fuel shortages have pushed down production to only 750 megawatts, said Mr Ghajar.
“The solution is to propose a law to Parliament requesting the disbursement of credits to Electricité du Liban in order to buy fuel because that’s the best solution for citizens, even if tariffs are raised” said Mr Ghajar.
Fuel shortages have triggered a thriving black market, with fuel selling for nearly double the official price.