According to the Ministry of Finance, transfers to Electricite du Liban (EDL) stood at $427.6M by July 2021, dropping by 20.1% 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 99.87% of total transfers, slumped yearly by 20% to reach $427M by July 2021, as the volumes of fuel and gas oil imported decreased by 7.2% and 54.23%, respectively.
EDL contributed for 2.19% out of the total oil bill – cost of gas oil and fuel oil purchase. This figure was lower at 0.01% during the same period of 2020.
EDL transfers represented a share of 7.4% of the government’s primary expenditures (excluding interest payments), which reached $5.339B by July 2021, compared to a higher share of 8.6% last year.
For years Lebanon struggles to get the lights on; in fact power cuts are very common among every household. For many Lebanese, the state’s inability to deliver reliable electricity has become a metaphor for their country’s wider failings. Children now celebrate when the power comes back “YAY, The electricity came”. Unfortunately, every day, lights, fridges and washing machines go off for hours when the supply from the state owned EDL stops. We hope that the government implements a sustainable plan to achieve the dream of 24/7 electricity in Lebanon, thus, applying better reforms to collect electricity bills from residents all over the Lebanese territory, adjusting prices to match the market, and putting an end to the corruption and mismanagement in the electricity sector.
EDL Contribution from Total Oil Bill by July 2021
Source: MOF, BlomInvest