Fuel cartels are adding darkness, pollution and cancer to Lebanon’s misery

Getty / Nick Donaldson

By Najat Saliba, Mireille Rebeiz, Rashad Rafeh and Choucri Haddad

A ruling establishment historically insulated from accountability for crimes continues to hold power in Lebanon today. Sectarian tensions and political infighting have led to monopolies over vital supply chains, with rationing of public services allowing parallel service structures – often owned by politicians and their affiliates – to emerge and dominate as single-source providers.

The electricity sector is a clear illustration of this dysfunction. Impunity, poor governance and the recent economic collapse forced the shutdown of Electricite du Liban (EDL), the national electricity provider, leading to widespread blackouts filled by diesel generators – now Lebanon's most deadly post-war consequence.

Long before these blackouts, the poor state of the EDL’s service had already driven widespread reliance on private diesel generators to make up for electricity rationing. With the blackouts, the influence of diesel generator network owners surged, creating powerful neighbourhood-level structures that greatly affect energy access. Until recently, these networks operated without regulation or oversight.

An exterior view of the building of the Lebanese Electricity Company 'Electricite du Liban', in Beirut, on August 17. EPA

In 2017, Beirut had over 9,300 diesel units in an area of just 20 square kilometres. By 2023, the power cuts had increased to over 20 hours daily. These generators, assembled locally, release large amounts of greenhouse gases, carcinogens and harmful particles. Data from monitoring since 2010 show the levels of these dangerous substances have been rising.

A recent study led by Najat Saliba, one of the authors of this essay, and coworkers found that diesel contributes to 50 per cent of carbon emissions in Beirut. The annual average level of fine particle pollution – particles of 2.5 micrometres or less – in the city was 17.2 micrograms per cubic metre, which is more than three times higher than the 5 micrograms per cubic metre limit recommended by the World Health Organisation.

The primary sources of this pollution were identified as diesel, petrol and incineration emissions. Compared to previous studies conducted at the American University of Beirut Chemistry Department rooftop, diesel emissions have doubled since 2016-2017. The associated cancer risk has also risen sharply, showing a 53 per cent increase compared to earlier measurements at AUB.

This increase in generator usage was driven by a massive supply gap, a consequence of Lebanon’s $43 billion deficit resulting from years of the electricity sector’s mismanagement

In addition to air pollution, the widespread use of diesel generators in Lebanon poses significant public safety risks, including fires, noise pollution and serious health hazards. In 2021 alone, Lebanon's civil defence responded to 221 incidents of generators catching fire or exploding.

One in 200 people in Lebanon has cancer, placing the country among the top 10 highest rates globally. The incidence of breast cancer has surged by 36 per cent in the past decade and has increased by 111 per cent over the past 20 years, according to the Our World in Data database.

This dire situation is underpinned by the failure to enforce critical Lebanese laws and international commitments designed to protect the environment and public health. Key among these are the Lebanese Air Protection Law of 2018 and the Environmental Protection Law of 2002, which establish guidelines for regulating emissions and mitigating environmental harm.

Additionally, the implementation of various circulars issued by the Ministry of Environment, aimed at controlling and reducing pollutant emissions, has been largely ineffective due to inadequate enforcement mechanisms.

The surge in citizen complaints has underscored the grave consequences of ongoing haphazard operations and the significant current and future risks they pose. In response, an environmental legal team led by Choucri Haddad, another of the essay authors, has filed formal complaints with the relevant governorates and pressuring the responsible authorities to enforce existing laws rigorously.

Privately owned generators rapidly became a profitable business in Lebanon, offering a crucial alternative to the country's unreliable national grid. In 2018, the generator subscription market was estimated at $1.1 billion. As the demand for fuel increased, the fuel import bill surged to approximately $2.2 billion by 2022. After including the costs of distribution, generator sales, and maintenance, the industry now stands at an estimated value of $4 billion.

In 2019, amid Lebanon's economic collapse, a distorted and corrupt fuel subsidy system – intended to aid the poor but ultimately empowering the elites – came to an end. Lifting the diesel subsidies in 2022 significantly affected the diesel generator market, leading to the dollarisation of prices and a sharp increase in the cost of electricity generated privately.

This increase in generator usage was driven by a massive supply gap, a consequence of Lebanon’s $43 billion deficit resulting from years of the electricity sector’s mismanagement. Consequently, Lebanon now faces the highest electricity bills in the region, with rates far exceeding those in neighbouring countries.

Despite numerous attempts by Lebanese authorities to regulate the commercialisation of generators, these efforts have consistently failed, largely because many among the ruling elites benefit from the ongoing controlled chaos. The oil cartel is a striking example of a monopoly exercised by traditional political families and party leaders. They employed agents and businessmen to manage the oil market, ensuring profits are funnelled back to them.

Today, 14 companies control the import of oil derivatives and their distribution in Lebanon, owning half of the 3,100 petrol stations in the country and dictating fuel prices. These companies control 70 per cent of local market production, with only 30 per cent left for two state-owned facilities.

Although there is reason to believe they behave as a cartel – maintaining dominance by sharing the market and organising competition to safeguard their collective interests – they are protected under Lebanon’s flawed monopoly law. When their profits are threatened, these companies withhold oil supplies, causing the regular fuel shortages that cripple the country.

The electricity sector in Lebanon, as highlighted by the World Bank, is emblematic of the country's broader governance failures. The need for comprehensive electricity reform is paramount and should be a central focus of any effort to restructure Lebanon’s economy. If left unaddressed, the inefficiencies in the electricity sector will continue to derail potential recovery plans, a concern that has prompted the International Monetary Fund to demand an electricity reform plan as a prerequisite for any financial assistance to Lebanon.

Lebanon produced nearly 24 million tonnes of carbon dioxide equivalent in 2022. It is estimated that diesel generators alone were responsible for more than 10 million tonnes, or about 44 per cent, of this. This heavy reliance hinders the country’s ability to fully meet the Sustainable Development Goals (SDGs), particularly SDGs 3.4 and 3.9, which focus on improving health outcomes by reducing harmful pollutants.

The ruling establishment has governed Lebanon since the civil war and has become adept at creating extra-legal parallel services that sustain clientelist networks and ensure people’s dependency. For many years, they managed to deceive the international community, but international donors have now grown more sceptical and are increasingly withholding aid. As a result, Lebanon’s rulers turned on their people to finance and secure political survival.

With a vacant presidency and a resigned cabinet, governance in Lebanon remains paralysed. Meanwhile, local oligarchs have devised a new way to harm people. Fifteen years of civil war, rampant corruption, political assassinations, economic collapse, refugee crises, the Beirut port explosion and a global pandemic were not enough. Now, those who are profiting from the diesel trade are adding darkness, air pollution and cancer to the growing miseries of the Lebanese people.

Dr Najat Saliba is a Member of Parliament in Lebanon

Dr Mireille Rebeiz is chair of Middle East Studies at Dickinson College

Rashad Rafeh is executive director of the Socio-Economic Institute for Development

Choucri Haddad is head of the Environmental Commission at the Beirut Bar Association