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Lebanon Loses $400 Million Yearly from Fuel Smuggling to Syria

Lebanon Loses $400 Million Yearly from Fuel Smuggling to Syria

Saturday, 9 May, 2020 - 06:45
Lebanese bread seen at a bakery in Lebanon. NNA

Lebanon is losing millions of dollars yearly due to the smuggling of goods to Syria through illegal border crossings.

A report broadcast by a local television channel revealed this week that the amount of smuggled fuel to Syria is estimated at $400 million per year.

It said traffickers have recently added wheat on their list of smuggled goods, depleting the capacity of the state to provide basic commodities to the local market.

The Lebanese Central Bank (BDL) subsidizes these two commodities.

BDL supplies dollars for the import of wheat, medicine, gasoline, diesel, and butane at the pegged exchange rate of LL1507.5, while the black market rate is above LL4,000.

The television said because wheat in Lebanon is subsidized, the cost of one metric ton is $150 while in Syria it is $320.

The wheat is milled in Lebanon and sold as flour at low prices in order for the bakeries to maintain the fixed price of the bread pack at LL1,500.

“This report shows again the very negative impact of illegal smuggling on the state’s finances,” said Lebanese Forces leader Samir Geagea.

In January, Finance Minister Ghazi Wazni revealed that $4 billion to $5 billion would be requested from international donor countries to finance purchases of wheat, fuel and medicines.

Democratic Gathering MP Hadi Abou Al-Hosn said the Progressive Socialist Party would go to the judiciary and question the government on this issue.

“While the Central Bank has put limits on the withdrawal of dollars from bank deposits to buy basic needs, such as wheat, fuel and medicine, depriving people of their money, we see mobs draining the economy by smuggling flour and diesel across the illegal border crossings in both directions. The situation is no longer bearable," he said.

Lebanon’s economic crisis continues to worsen, while the value of the Lebanese lira dipping and the prices of goods tremendously increasing.

In October, Lebanese banks began reducing dollar withdrawals before they stopped them entirely last month.

Last week, the government formally requested the assistance of the International Monetary Fund (IMF) to save Lebanon from the deep financial crisis.

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