Lebanon’s Bank Governor Faces Censure Halting Fuel Subsidies

The central bank governor of Lebanon said that nobody runs the country. He commented after the government criticized his decision to stop fuel subsidies that reduced currency reserves.

On Saturday, in an interview, Riad Salameh said that the government might solve the problem soon with the necessary legislation.

On Wednesday, he denied that he acted alone in announcing an end to the subsidies.  He also said that it was not new that the decision was coming.

Salameh told Radio Free Lebanon that nobody is running the country.

On Saturday, Lebanon’s army took fuel from gas stations to limit hoarding in the middle of severe shortages.

Financial Meltdown

Part of Lebanon’s broader financial meltdown is the worsening of the fuel crisis. Bakeries, Hospitals, and numerous businesses plan to decrease operations or even shut down entirely as a fuel seems to run dry.

The Medical Center at the American University of Beirut said it was frightened with a forced shutdown on Monday because of shortages of fuel generating electricity.

This means that lifesaving medical devices such as ventilators will stop operating. The hospital said that around 55 patients (40 adults and 15 children) living on respirators would die immediately.

The move of the central bank to halt subsidies will produce price increases. The latest twist in a crisis that lowered the Lebanese pound by 90 percent in two years resulted in more than half the Lebanese population into poverty.

The central bank effectively subsidized vital imports such as fuel by providing dollars below the actual price of the pound at exchange rates.  Recently it showed 3,900 pounds to the dollar while parallel market showed rates above 20,000.

On Saturday, the army invaded petrol stations and took fuel to distribute to desperate customers with the rapidly deteriorating situation.

A report said that the army confiscated more than 79,000 liters of petrol stored at a couple of filling stations.