BDL’s Governor Salameh: $828 Million for Subsidizing Gasoline, Diesel Oil, and Fuel in July 2021 Alone! Smuggling and Storing Has to be Stopped

BDL’s Governor Riad Salameh issued a strong statement on 30/7/2021 saying that he has to be frank with the Lebanese people, who need to know that the economic crisis is being exploited to feed the unlimited greed of those involved in the minerals sector. After mentioning that BDL has assumed its responsibilities in subsidizing the purchase of minerals by importers — despite its insistence on complying with article 91 of the Code of Money and Credit and on protecting required reserves and despite the implications of government default in March 2020 — the Governor reported that BDL sold in July alone $828 million to importers to buy minerals as follows: $708 million in gasoline and diesel oil, and $120 million in fuel oil.

And despite this outrageous amount, the Governor added, we still witnessed severe shortages of diesel and gasoline in July that threatened the hospitalization and food securities of the people and led to the emergence of steep black markets for these commodities. And that was all caused by the smuggling and storing of these commodities by those involved.

As a result, the Governor said that the solution to this crisis does not lie in blaming BDL – who has never delayed in providing the needed funding – but it lies in Lebanese public officials assuming their responsibilities to stop smuggling and storing and to make sure that all and the full subsidized commodities go directly to the Lebanese public.

Interesting to note that BDL’s foreign assets fell from $37.3 billion in December 2019 to $20.3 billion in mid-July 2021. Also, estimates put that at a market exchange rate of 20,000 LBP for the USD, and at a subsidized rate of 3,900 and import coverage of 85%, BDL assumes 68 dollars of every $100 dollars’ worth of minerals imports.

Main Items of BDL’s Balance Sheet:

USD BillionDec 2019Dec 2020Mid- July 2021
Foreign Assets37.324.120.3
Circulated Currency720.527.1

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