Lebanon's state-owned electricity company will offer its employees discounted rates for power as part of the resolution of a disagreement with the country's caretaker ministers of finance and of energy and water over benefits.
Minister of Energy and Water Walid Fayad ratified a decision by Electricite du Liban's management and the EDL board to reduce electricity costs for employees and retired staff, he told The National on Wednesday, aiming to ease the impact of rampant inflation and devaluation of the pound amid a public sector salary collapse.
The Lebanese currency has lost 98 per cent of its value against the dollar since the start of the country's financial collapse in 2019.
The Ministry of Finance, the second authority over the state company, had previously refused the new benefit, saying it “contradicts the law”, a spokeswoman for Finance Minister Youssef Khalil told The National.
“We called for week-long strike on Tuesday after the Ministry of Finance's refusal to implement reduced electricity tariffs,” Mohamed Sabbagh, a member of EDL union, told The National.
The workers' financial situation is “catastrophic” as their salaries only worth a few hundred dollars, he said.
EDL workers called off their strike a few hours into the action after reaching an agreement with the Ministry of Finance.
“The minister and his advisers will seek legal review within two days [on the reduced power tariff],” Mr Sabbagh said.
Mr Khalil has promised to find a solution that will provide the workers with a preferential benefit while still complying with the law, Mr Sabbagh added.
The strike would have posed a risk to Lebanon's strained energy sector and the distribution of electricity.
“EDL employees control the transmission network as well as some key functions enabling the work of distribution service providers,” Mr Fayad said.
“Such a strike may hinder electricity services and the success of the supply improvement plan which is otherwise progressing well.”
Lebanon's currency collapse has taken a toll on public sector workers, including EDL employees. Past salary adjustments have been quickly eroded by rampant inflation, leaving public servants struggling to meet basic necessities.
Heated controversy
Mr Khalil's refusal to allow a reduced power tariff for EDL's current and former employees sparked heated controversy in the cabinet.
“This decision violates the principle of equality and places financial burdens on the treasury without legal basis,” Mr Khalil said in a note seen by The National. The minister cited article 75 of the 2021 finance law, which cancelled all preferential electricity tariffs.
“We inform you of the disagreement with the decision in question,” he said.
Mr Fayad argued the decision was lawful. "[The decision], according to my reading of the law, is lawful, and helps provide a welcome, albeit quite small, incremental improvement to their situation,” he said.
Mr Fayad said the move was required “following the immense degradation in salaries that brings their current salaries to levels well below their productivity and what would be a fair compensation”.
The Finance Ministry “will have to help solve this issue in order to avoid unnecessary escalation”, Mr Fayad told The National earlier.
While a solution has been found for EDL workers, other public servants will not benefit from the preferential rate, which dramatically increased for the first time in a decade in November.
The move was an attempt to increase power supply amid persistent electricity blackouts. Currently, EDL provides about four hours of electricity each day, meaning those Lebanese who can afford it must resort to expensive generators to ensure a 24-hour power supply.
The price rise has hit all public servants hard, with many struggling to pay their electricity bills due to their depreciated salaries, said Hussein Jawad, president of the Association of Basic Education.
He called the situation “unfair”.
“We are calling for either a similar benefit or a salary increase to offset the rising electricity costs,” he said.
