Smuggling Of Subsidized Fuel To Syria Worsens Lebanese Energy Crisis - Industry

MOSCOW (UrduPoint News / Sputnik - 15th May, 2021) Fuel shortages in Lebanon have been worsened by locals smuggling subsidized fuel to Syria for resale at market value, Fadi Abou Chakra, the representative of the Mediterranean nation's fuel distributors, told Sputnik.

"In all honesty, yes. Smuggling has impacted the availability of fuels in Lebanon. However, authorities have undertaken active measures to address this phenomenon and have cracked down on smuggling and are exerting their power on the ground," Abou Chakra stated.

Suffering from a prolonged liquidity crisis that saw the local Currency depreciate by a factor of eight, Lebanese authorities have developed a subsidy mechanism to curb rising prices by offering importers access to the country's depleting hard currency reserves at favorable exchange rates.

"I am not in a position to state exact numbers, but the quantity of imports has declined and does not meet the demands of the Lebanese market, and this has been the case since the beginning of the year," Abou Chakra added.

Regarded as essential commodities, fuels have remained subject to the subsidy mechanism, with a rationing system installed to account for the Lebanese population's bare minimal requirements.

Exacerbated by the smuggling of fuel to neighboring Syria, the Mediterranean nation's fuel crisis culminated in long lines at the gas stations over the course of the past week, amid allegations of an imminent termination of the subsidy mechanism and an anticipated surge in fuel prices, with a number of stations closing down as their fuel reservoirs ran dry.