Lebanon gas stations to abandon dollar payments, suspend strike
Petrol station owners in Lebanon on Friday suspended a strike and said they reached a deal with the government allowing them to pay suppliers in Lebanese pounds, following complaints over a shortage in dollars. The Syndicate of Gas Station Owners on Thursday night had announced an open-ended strike, saying banks were not supplying them with the dollars needed to pay importers and suppliers because of a shortage in reserves.
Lebanon was thrown into confusion overnight on Friday as some petrol stations turned off their pumps — the second time that drivers have been unable to refuel their vehicles in less than two weeks.
The fuel “shortage” arrived against the backdrop of a social media campaign calling for the removal from office of the governor of Lebanon’s Central Bank, Riad Salameh, as a result of Lebanese banks’ continued abstention from securing liquidity in dollars for those who do not have dollar-based accounts, and limiting the amount of funds available for withdrawal through ATMs.
These moves have allowed traders to control the exchange rate of available dollars, increasing the rate in some regions to more than LBP1,600. The official rate is LBP1,507.
A source at the central bank told Arab News that the bank’s decisions had been triggered by unusual patterns of dollar withdrawals in “many Lebanese areas within a limited period of time,” claiming that up to 20 times the normal daily rates were withdrawn, “confusing the banks.” “Through a comprehensive audit by the Central Bank, it was found that these funds were in dollars and that they arrived in Syria, Turkey and Iran, which are experiencing severe economic crises,” the source said. “These mafia-like operations led to questioning, especially as they were carried out during US sanctions on Hezbollah, Syria and Iran. These dollar withdrawals were also accompanied by a sell-off of the dollar drawn from banks on the black market, specifically to money exchangers at high prices for profits. “The demand for the dollar cannot be the result of economic activity,” the source said. “The amounts offered by banks have been the same for a long time, which means that there has been an unjustified use of the dollar, which is not related to increased imports — in light of the economic downturn in Lebanon.”