(Bloomberg) --
Lebanon's central bank lifted fuel subsidies effective Thursday, adding another level of hardship to a country already reeling from a devastating economic crisis.
President Michel Aoun summoned central bank governor Riad Salameh after the move, which is meant to alleviate an energy shortage but is also expected to drive up prices, increasng despair in a country where poverty has already become rampant.
The central bank will use market prices for fuel when extending letters of credit to importers, according to a central bank statement released late Wednesday. Gas station owners and fuel importers had accused the central bank, whose foreign reserves have been depleted, of being slow to open credit lines, creating a fuel shortage that's plunged the once-middle class nation into darkness all but several hours a day.
Lebanon has been suffering since late 2019 from its worst financial meltdown in decades, a byproduct of decades of corruption and mismanagement. The currency has collapsed, driving inflation into triple digits and wiping out life savings. The government is bankrupt, has defaulted on its international debt and has failed to take the measures required to clinch international support.
Read: France-Led Conference on Lebanon Raises $370 Million in Aid
Lebanon's president in July asked billionaire Najib Mikati to form a new government, after two other candidates failed in less than a year. The premier said he has the international backing and business experience to stop the country's descent toward an economic and social implosion that would reverberate across the Middle East.
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