(Bloomberg) -- Lebanon's gas station owners will stage a nationwide strike Wednesday to protest the government's failure to provide enough dollars to pay suppliers.
The businesses say local banks lack the hard currency they need, forcing them to buy dollars at exchange houses above the fixed rate of 1,507.5 Lebanese pounds to the greenback.
The Energy Ministry prices gasoline and diesel on a weekly basis in dollars but customers mostly pay in local currency, leaving retailers with Lebanese pounds that need to be converted to close letters of credit to suppliers. The petroleum industry requires around $3 billion a year.
“If we don't find dollars, we won't be able to import products and there will be a shortage,” Maroun Chammas, vice chairman of MEDCO petroleum company, said last week. The problem had grown more severe over recent months, he said.
Lebanon's trying to reduce its fiscal deficit and manage rising debt to unlock billions in international loans and grants to boost its stagnant economy. Officials have proposed some reform measures, additional taxes and subsidy cuts to generate revenues and lower spending, the bulk of which goes to servicing debt and salaries.
Lebanon on Debt Tightrope as S&P Sets Clock Ticking to Downgrade
To contact the reporter on this story: Dana Khraiche in Beirut at dkhraiche@bloomberg.net
To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Mark Williams, Karl Maier
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