Lebanon can save US$1.5 billion from fall in oil prices

If the international price of oil remains low, Lebanon will be saving up to US$1.5 billion on its energy bill annually, Central Bank Governor Riad Salameh said. “Lebanon has benefited from the decline in oil prices. In fact, our import bill is around US$6 billion every year, and with this decline we might save from US$1 billion to US$1.5 billion,” he said.

Global oil prices have fallen sharply over the past year, leading to a significant drop in revenues for many energy-exporting nations, while governments in various countries that import fuel have benefitted by saving on their energy bills.

The drop in oil prices has helped the Finance Ministry to drastically reduce allocations to state-owned Electricite du Liban for the purchase of fuel oil that runs most of the country’s aging power plants. But the International Monetary Fund has warned Lebanon that it should not count on the drop of oil prices, urging the government to reduce subsidies to the electricity sector.

Salameh said that Lebanon was also positively impacted by the fall of the euro.“The fall of the euro has strengthened our purchasing power but at the same time it has affected our competitiveness, which has decreased, considering that we are a dollarised economy,” he said.