Starting next week, Lebanese people will face a complete power outage for at least an additional five hours daily. This development follows announcements from generator owners about a reduction in electricity supply from the parallel power network due to a serious diesel shortage and the declining supply of state electricity to unprecedented levels.
Abdo Saadeh, president of the generators’ association, stated that the generators will be compelled to implement a five-hour daily rationing starting next week. He added in an interview with "Asharq Al-Awsat" that generator owners are "forced to ration due to the diesel shortage crisis, as they purchase diesel—if available—from the black market at prices reaching 40,000 Lebanese pounds ($3 at the black market exchange rate) per 20-liter container, while the state sets its price at 28,000 pounds since fuel is still subsidized."
Lebanon has been experiencing a fuel shortage for some time due to the slow actions of the Central Bank of Lebanon in opening the necessary credit lines, aiming to preserve what remains of foreign currency. They have repeatedly stated their inability to continue the current subsidy mechanism which provides 85% of the dollars required for importing basic commodities including fuel at the official exchange rate against the pound.
The continued smuggling of diesel to Syria, as well as its hoarding by traders in Lebanon for resale at inflated prices once subsidies are lifted, has exacerbated the crisis. Recently, fuel distributors warned that the increased demand for diesel from generator owners amid the ongoing electricity crisis would further strain diesel supplies since available quantities will not meet market demands.
Besides the diesel shortage, the parallel network (generator power) technically cannot provide electricity for 24 hours daily; it has traditionally supplied half of Lebanon's electricity needs, similar to the amounts provided by Electricité du Liban, as Saadeh clarifies. He notes that currently, generators are being asked to cover far more than usual, as Electricité du Liban can now provide only two hours a day, and generator owners, especially amid the diesel crisis, cannot cover all rationing hours.
The General Directorate of Oil announced yesterday that the number of distribution companies receiving the product is around 200, spread across all regions, at the official price in the pricing schedule issued by the Ministry of Energy and Water, and according to a quota system being discussed and approved based on supply, demand, and market need. They stated that "all available indicators confirm that the market is being supplied with diesel, as the oil facilities in Tripoli and Zahrani alone provided the entire Lebanese market with 20 million liters of diesel this week."
They added that "some operators in the electric generator sector update us daily about the lack of diesel to meet the needs of the generators, using this excuse as a pretext to announce reduced supply and rationing schedules."
Lebanon's electricity needs are estimated at 3000 megawatts, with Electricité du Liban providing half of that (approximately 1200 megawatts from power plants, plus production from floating power ships). However, Electricité du Liban announced two days ago that the total energy produced on the network has gradually declined over recent weeks to around 720 megawatts. This decline negatively impacts the stability and reliability of the electrical network, as any electrical shock could lead to a total blackout and shutdown of all facilities.
The current electricity crisis is attributed to the lack of funds necessary for importing fuel for electricity. The Central Bank of Lebanon still refuses to release a treasury advance of $200 million for Electricité du Liban, according to a monitoring parliamentary source. In the same conversation with "Asharq Al-Awsat," the source noted that the Central Bank also refuses to approve credits for fuel imports. "There are three ships waiting off the Lebanese coast and four more on their way to Lebanon, and if the necessary credits are not opened, Lebanon will face a complete blackout within three days."
Lebanese Parliament approved the advance for Electricité du Liban at the end of March, a month after Energy Minister Raymond Ghajar warned of a total blackout if sufficient financial credits for fuel imports were not available. The implementation of the advance was legally halted due to a challenge by "Forces" MPs before the Constitutional Council, arguing that it is unconstitutional as it would be financed from the Central Bank's mandatory reserves of foreign currency—that is, depositors' money. Days ago, the advance law was revived after the Constitutional Council did not rule on the challenge within the legally specified timeframe due to a lack of quorum.
In addition to the credit issues, the electricity crisis in Lebanon worsened after the Turkish company operating two power-generating ships announced its cessation of operations following a court order to seize the ships due to corruption allegations. The company threatened to withdraw due to the Lebanese state's failure to pay over $100 million in dues from the previous year.
