According to the Ministry of Finance, transfers to Electricite du Liban (EDL) stood at $462.9M by September 2021, dropping by 31.5% 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 31.5% to reach $461.3M by September 2021, as the volumes of fuel and gas oil imported decreased by 31.44% and 59.56%, respectively.
EDL contributed for 2.09% out of the total oil bill – cost of gas oil and fuel oil purchase. This figure was lower at 0.08% during the same period of 2020.
EDL transfers represented a share of 6.2% of the government’s primary expenditures (excluding interest payments), which reached $7.053B by September 2021, compared to a higher share of 8.3% last year. Furthermore, transfers to EDL from January 2010 to September 2021 have reached a high value of around $18B.
As EDL struggles to provide reliable electricity, Lebanon is turning to solar power. Unfortunately, the majority of households can’t afford solar system panels, and in some regions, power cuts can last up to 23 hours in a day. Authorities expect that the electricity crisis will deteriorate further in the near future and fear of complete blackout. In fact, they fear that the lights will go out at Beirut Airport, port, and the presidential palace.
EDL Contribution from Total Oil Bill by September 2021
Source: MOF, BlomInvest