Ending subsidies and appreciating US dollar would increase the price of gasoline can to LBP 100,000?!
As every Wednesday, the Ministry of Energy and Water issued on February 17, 2021 the fuel price list, including the sale price of gasoline, gas and diesel, with the price of gasoline can reaching LBP 31,200.
The price of gasoline can is set based on the global price of gasoline, in addition to customs duties, internal consumption fees, the value-added tax and the commission of distribution companies and fuel stations.
Lowest and Highest Prices
The price of gasoline can has gone up in one year by LBP 7,500, from LBP 23,700 on February 18, 2020 to LBP 31,200 on February 16, 2021. As shown in the following table, the highest price (LBP 33,000) has been recorded at the end of 2010. It dropped to LBP 18,500 in March 2016 as a result of the global price decline before rising again.
Would the price of gasoline reach LBP 100,000?
In view of this rise, citizens fear a further increase in the coming weeks, especially if the dollar’s value against the Lebanese currency keeps jumping up and the fuel subsidies are removed. According to global prices, the price of gasoline can (95 Octane) reached about USD 8.75 on February 16, 2020, or LBP 13,260 according to the subsidized price (LBP 1515 per 1 USD) and about LBP 78,750 according to the exchange rate in the black market (LBP 9,000). Adding the commission of distribution companies and stations and the state taxes and fees, the price would amount to LBP 90,500. Therefore, if the subsidy is removed, the US dollar rate stands at more than LBP 9,000 and the global prices increase, the price of gasoline can might exceed LBP 100,000. This would disrupt the economy and cripple the country, thus justifying the citizens’ concerns.
A table showing the evolution of gasoline prices (2010-2021).
Source: Price list issued by the Ministry of Energy and Water in the said dates.
Note: An additional 10% commission has been imposed in the last months of 2020 to reduce the cost of subsidies borne by BDL.