According to the Ministry of Finance, transfers to Electricite du Liban (EDL) stood at $462.9M by October 2021, dropping by 37.4% 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 99.64% of total transfers, slumped yearly by 37.4% to reach $461.27M by October 2021, as the volumes of fuel and gas oil imported decreased by 41.05% and 62.23%, respectively.
EDL contributed for 2.4% 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 5.6% of the government’s primary expenditures (excluding interest payments), which reached $7.76B by October 2021, compared to a higher share of 8.1% last year.
Lebanon’s state power company EDL issued a new detailed list of tariffs, the first change in prices since 1994, in order to eventually increase the power supply. According to the “national emergency plan for the electricity sector,” the electricity bill, collected in LBP, was supposed to be calculated at a dollar exchange rate of Sayrafa plus 20%. However, the decision to apply the new tariff remains pending and a meeting will be held this week by EDL’s board of directors to decide on this matter. Noting that although this step might seem logical, weak governance, corruption and mismanagement are the root of the sector’s problems and remain largely unaddressed.
EDL Contribution from Total Oil Bill by October 2021
Source: MOF, BlomInvest