Higher Oil Prices Lead to a Substantial Increase in EDL Transfers

According to the ministry of Finance, in August 2017, transfers to EDL reached LBP 318.20B ($211.08M). Indeed, transfers rose considerably by LBP 482.86B ($320.30M) between Jan-August 2016 (LBP 785.71B) ($521.20M) and Jan-August 2017 (LBP 1,268.57B)($841.51M).

This significant rise was mainly a result of higher payments to KPC and Sonatrach the fuel and gas producers. Payments to the two oil suppliers were LBP 488.18B ($323.83M) higher than their level in the past year. The total increase was in fact of 63.7%, which was mainly driven by an increase in the quantity of Fuel oil imported by 27.8% and a slight decrease in the quantity of gas oil imported by 4.78%.

Also, while EDL contributed to 7.7% from the total oil bill in the period of 2016, the percentage decreased to reach only 2% during the same period in 2017.

The share of the government expenditure going to EDL from the government naturally increased between the 2 periods to reach 13.7% of total expenditures in Jan-August 2017 compared to 8.1% in the same period in 2016. Thus, the government’s primary expenditures reached a level of LBP 9,227B ($6.12B) in 2017.

Copntribution of EDL in the total oil bill

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Source: MoF

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