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.



Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
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Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters

The credit rating agency “Moody’s Ratings” upgraded Saudi Arabia’s credit rating to “Aa3” in local and foreign currency, with a “stable” outlook.
The agency indicated in its report that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification and the robust growth of its non-oil sector. Over time, the advancements are expected to reduce Saudi Arabia’s exposure to oil market developments and long-term carbon transition on its economy and public finances.
The agency commended the Kingdom's financial planning within the fiscal space, emphasizing its commitment to prioritizing expenditure and enhancing the spending efficiency. Additionally, the government’s ongoing efforts to utilize available fiscal resources to diversify the economic base through transformative spending were highlighted as instrumental in supporting the sustainable development of the Kingdom's non-oil economy and maintaining a strong fiscal position.
In its report, the agency noted that the planning and commitment underpin its projection of a relatively stable fiscal deficit, which could range between 2%-3% of gross domestic product (GDP).
Moody's expected that the non-oil private-sector GDP of Saudi Arabia will expand by 4-5% in the coming years, positioning it among the highest in the Gulf Cooperation Council (GCC) region, an indication of continued progress in the diversification efforts reducing the Kingdom’s exposure to oil market developments.
In recent years, the Kingdom achieved multiple credit rating upgrades from global rating agencies. These advancements reflect the Kingdom's ongoing efforts toward economic transformation, supported by structural reforms and the adoption of fiscal policies that promote financial sustainability, enhance financial planning efficiency, and reinforce the Kingdom's strong and resilient fiscal position.