According to the Ministry of Finance, transfers to EDL stood at $433.611M by June 2021, dropping by 20.8% compared to the same period last year. This was mainly a result of lower payments to KPC and Sonatrach for fuel oil purchases, and lower debt services.
In details “Payments to fuel and oil gas suppliers KPC and SPC”, constituting 79.08% of total transfers, slumped yearly by 20.06% to $342.918M by June 2021, as the volumes of fuel and gas oil imported decreased by 16.92% and 51.96%, respectively.
EDL contributed for 2.57% out of the total oil bill – cost of gas oil and fuel oil purchase. This figure was lower at 0.02% during the same period of 2020.
EDL transfers represented a share of 7.1% of the government’s primary expenditures (excluding interest payments), which reached $4.82B by June 2021, compared to a higher share of 7.9% last year.
One of the biggest problems of Lebanon is the shortage in electricity. In order to revive the Lebanese economy the government must have a sustainable plan to achieve the dream of 24/7 electricity in Lebanon. Without any constructive plan by the government, Lebanon will not be able to see the light anytime soon. Especially at a time when EDL transfers have become costly in the face of declining BDL foreign reserves, as at this going rate EDL transfers could reach more than $950M at end of 2021.
EDL Contribution from Total Oil Bill by June
Source: MOF, BlomInvest