Power Crisis Stifles the Lebanese Amid Lack of Feasible Solutions

Zouk Power Station is seen in Zouk, north of Beirut, Lebanon March 27, 2019. Picture taken March 27, 2019. REUTERS/Mohamed Azakir
Zouk Power Station is seen in Zouk, north of Beirut, Lebanon March 27, 2019. Picture taken March 27, 2019. REUTERS/Mohamed Azakir
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Power Crisis Stifles the Lebanese Amid Lack of Feasible Solutions

Zouk Power Station is seen in Zouk, north of Beirut, Lebanon March 27, 2019. Picture taken March 27, 2019. REUTERS/Mohamed Azakir
Zouk Power Station is seen in Zouk, north of Beirut, Lebanon March 27, 2019. Picture taken March 27, 2019. REUTERS/Mohamed Azakir

Lebanon’s electricity crisis severely worsened over the past few days, with power outages extending to 20 hours per day even in the capital.

Many generator owners have raised the monthly tariff because of the high cost of diesel and reduced subscription hours, which drowned several areas in total darkness that was only broken by candlelight.

The electricity crisis prompted a number of stores, especially small ones, to stop buying food commodities that need a refrigerator.

Minister of Energy Raymond Ghajar said that power rationing was due to the lack of fuel, citing “judicial reasons” behind the delay of delivery by fuel ships.

In response, member of the Progressive Socialist Party (PSP) and electricity expert Mohammed Basbous stressed that the ministry was required to provide further information on the matter.

“It’s surprising that we currently face an electricity crisis, especially since the Algerian Sonatrach company announced that it would commit to supplying Lebanon with the amount of fuel it needs and would refrain from renewing the contract at the end of the year,” he told Asharq Al-Awsat.

“The electricity crisis was supposed to start at the end of the year and not now, if no alternatives were found,” he emphasized.

Basbous asked about the reason why additional quantities were not brought from the Kuwait Petroleum Corporation, which has a similar contract to that of Sonatrach with the Lebanese state.

The Minister of Energy had announced that Iraq intended to supply Lebanon with fuel in exchange for food, Lebanese commodities and medicine. But Basbous stressed that this was not a feasible solution, due to the scarcity of food in the country, as factories were struggling to maintain their operation amid a severe financial and economic crisis.

The PSP member underlined that the lack of fuel and its high price were due to smuggling, as there are “lines of trucks that leave daily from the refineries and go directly to the border with Syria.”

He noted that the only solution was a government decision to immediately launch the comprehensive reform process, starting from the electricity and fuel issue, in addition to controlling cross-border smuggling.



Gold Jumps, on Track for Best Week in Over a Year on Safe-haven Demand

FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo
FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo
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Gold Jumps, on Track for Best Week in Over a Year on Safe-haven Demand

FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo
FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo

Gold prices rose over 1% to hit a two-week peak on Friday, heading for the best weekly performance in more than a year, buoyed by safe-haven demand as Russia-Ukraine tensions intensified.

Spot gold jumped 1.3% to $2,703.05 per ounce as of 1245 GMT, hitting its highest since Nov. 8. US gold futures gained 1.1% to $2,705.30.

Bullion rose despite the US dollar hitting a 13-month high, while bitcoin hit a record peak and neared the $100,000 level.

"With both gold and USD (US dollar) rising, it seems that safe-haven demand is lifting both assets," said UBS analyst Giovanni Staunovo.

Ukraine's military said its drones struck four oil refineries, radar stations and other military installations in Russia, Reuters reported.

Gold has gained over 5% so far this week, its best weekly performance since October 2023. Prices have gained around $173 after slipping to a two-month low last week.

"We understand that the price setback has been used by 'Western world' investors under-allocated to gold to build exposure considering the geopolitical risks that are still around. So we continue to expect gold to rise further over the coming months," Staunovo said.

Bullion tends to shine during geopolitical tensions, economic risks, and a low interest rate environment. Markets are pricing in a 59.4% chance of a 25-basis-points cut at the Fed's December meeting, per the CME Fedwatch tool.

However, "if Fed skips or pauses its rate cut in December, that will be negative for gold prices and we could see some pullback," said Soni Kumari, a commodity strategist at ANZ.

The Chicago Federal Reserve president reiterated his support for further US interest rate cuts on Thursday.

On Friday, spot silver rose 1.8% to $31.34 per ounce, platinum eased 0.1% to $960.13 and palladium fell 0.6% to $1,023.55. All three metals were on track for a weekly rise.