Cash-strapped Lebanon signs fuel deal with Iraq to ease crisis

Lebanon to pay for 1 million tonnes of fuel oil a year in goods and services, helping ease its power shortage, according to new deal.

Lebanon is experiencing its worst economic crisis since its 15-year civil war ended in 1990 [File: Hassan Ammar/AP]

Iraq has signed an agreement allowing the cash-strapped Lebanese government to pay for 1 million tonnes of heavy fuel oil a year in goods and services, helping Lebanon ease its acute power shortage, the two sides said on Saturday.

Lebanon is in the throes of an economic meltdown threatening its stability. It has all but run down foreign reserves and faces a growing shortage of fuel, medicine and other basic goods. Most Lebanese face power cuts for many hours a day.

Iraqi Finance Minister Ali Allawi and Lebanese caretaker Energy Minister Raymond Ghajar co-signed the agreement in the presence of Iraqi Prime Minister Mustafa al-Kadhimi.

Lebanese officials have said the Iraqi supplies will ease the situation at home.

Ghajar, speaking on his return to Beirut after signing the deal, said the fuel would be used for electricity generation and was enough for four months. He said it was worth about $300m to $400m.

Iraq’s Oil Ministry said in a statement it would supply Lebanon with surplus heavy fuel oil from its refineries.

Lebanon is experiencing its worst economic crisis since its 15-year civil war ended in 1990.

The country, which has struggled to meet electricity demand at the best of times, has imposed increasingly long power cuts across the nation as fuel supplies have run short during the crisis that erupted in late 2019.

Many Lebanese rely on private generators that use diesel, which is also in short supply.

A shortage of foreign currency had made it impossible for Lebanon to secure fuel and other essential goods.

Hospitals said this week their generators were at risk of running out of fuel, putting critical patients at risk.

On Saturday, a top hospital director warned that the deepening economic crisis has piled pressure on hospitals, leaving them ill-equipped to face any new wave of the coronavirus.

“All hospitals… are now less prepared than they were during the wave at the start of the year,” said Firass Abiad, the manager of the largest public hospital in the country battling COVID.

“Medical and nursing staff have left, medicine that was once available has run out,” and ever-lengthening cuts to the mains power supply have left hospitals under constant threat.

Even the Rafik Hariri University Hospital he runs has been struggling to cope.

“We only get two to three hours of mains electricity, and for the rest of the time it’s up to the generators,” Abiad told AFP news agency.

Source: News Agencies