Lebanese petrol stations shudder to a halt amid nationwide strike

Currency crisis leaves petrol stations running dry, sparking strike action and queues for fuel across Lebanon.

A gas station closes during a protest agains tight supply of dollars in Beirut, Lebanon September 18, 2019
Several petrol stations in Beirut were cordoned off with tape on Friday amid growing fears of a financial collapse [File: Mohamed Azakir/Reuters]

Beirut, Lebanon – A nationwide strike has hit Lebanon‘s petrol stations after the government failed to address demands by owners to be able to pay for fuel imports in the local currency, rather than US dollars, amid a growing US dollar liquidity crisis.

Long lines could be seen on Friday outside petrol stations in the capital, Beirut, in the immediate aftermath of the announcement of the strike. Similar scenes were reported in the eastern city of Baalbek and in the northern coastal towns of Jbeil and Batroun.

Later in the evening, several petrol stations in Beirut were cordoned off with tape, while images circulated online showed banners hung up at stations apologising for the inconvenience caused.

“We apologise to the Lebanese people. Due to the lack of dollars to buy fuel, we are closing our station until we can secure this product in Lebanese pounds,” a picture of a banner shared on Twitter read.

In a televised news conference, Sami Brax, the head of the Syndicate of Gas Station Owners, announced on Friday afternoon that Lebanese officials had failed to honour an agreement allowing them to buy fuel in local currency – a statement echoed by fuel-importing companies that also went on strike.

Petrol station owners sell their fuel in Lebanese pounds, but have had to buy it in US dollars from importers.
But growing fears of a financial collapse has led to a shortage of US dollars amid worries that the state would be unable to maintain a two-decade-old fixed rate of $1 to 1,507.5 Lebanese pounds.

Rush for US dollars

Unofficial rates have risen past 1,600 Lebanese pounds in recent weeks, causing a rush for US dollars, which have subsequently become unavailable at many banks. Many petrol station owners have consequently been forced to pay the higher unofficial rates to secure the US dollars to buy their fuel.

Lebanon central bank to secure US dollars

The union had been set to go on strike on Monday, but called the action off after receiving assurances from officials that they would be able to buy fuel in Lebanese pounds. A strike planned for late September had also been averted after similar intervention by Prime Minister Saad Hariri.

But the agreement had not been implemented, a statement released by the syndicate on Friday said. This led them to hold an emergency meeting, in which they decided to strike, effective immediately.

Brax said the strike would continue until a written decision was issued by authorities guaranteeing fuel would be sold to them in Lebanese pounds.

Speaking to Al Jazeera, he said fuel importers had allowed petrol station owners to buy in Lebanese pounds for three days starting on Monday, before suddenly stopping on Thursday. “We’ve called off our strike the first time and the second time, because each time they [officials] said it was all solved. They lied, now the strike is open-ended,” Brax said.

A delegation of owners of fuel-importing companies met Hariri at around 7pm local time (16:00 GMT), some five hours after the strike was announced.

Following the meeting, the head of the union announced that they would resume accepting Lebanese pounds on Saturday. However, petrol station owners did not immediately announce an end to their strike.

Ghassan Hasbani, Lebanon’s deputy prime minister, said that the issue – owing to “a glitch in the financing process” – had been resolved, adding that he expected petrol station owners to call off their strike imminently.

“It is over,” he told Al Jazeera. “The action taken by the importers was uncalled for.”

Lebanese Economy Minister Mansour Bteich, and Finance Minister Ali Hassan Khalil, could not be reached for comment. Two advisers to Hariri declined to comment.

Petrol station owners are not the only ones suffering from the dollar liquidity crunch. Mill owners, who buy their imported wheat in US dollars, announced on Tuesday that they would begin selling flour in US dollars due to the liquidity crisis.

Shortly afterwards, bakery owners announced they would strike on Monday unless there was a solution to the dollar shortage by then, raising fears of bread shortages in the country.

Source: Al Jazeera