BEIRUT: The president and prime minister authorized the Finance Ministry to release the funds for the fuel oil shipment to avoid an electricity blackout, a source at the ministry said Thursday.
“The problem of the fuel oil funding has been solved after President Michel Slieman and Prime Minister Tammam Salam used their prerogatives to allow the Finance Ministry to issue letters of credit to buy the fuel oil,” the source told The Daily Star.
Finance Minister Ali Hasan Khalil had Wednesday refused to order the issuance of LCs to buy fuel oil, saying that he did not have authorization from the Cabinet.
The source stressed that the president and prime minister were allowed to take exceptional decisions when the Cabinet was unable to convene. The Cabinet has not held a meeting since it was formed due to the failure of the ministerial committee to agree on a policy statement.
The source dismissed the excitement over Khalil’s decision not to pay for the fuel oil, noting that the country’s reservoirs had fuel to run the power plants for at least a month.
Most of the country’s aging power plants still run on fuel oil or gasoil, and experts say that 85 percent of EDL’s losses are due to the high prices of fuel oil.
Former Finance Minister Mohammad Safadi estimated the electricity deficit at $2 billion.
The source said several fuel oil tankers were still waiting to unload their shipments at Zouk Mikail power plant.
He added that the pier at the plant could not accommodate all of the fuel tankers at one time.
“There is one boat loaded with fuel oil waiting off the Lebanese coast for the past 12 days,” the source said. “The owners of the boat charge the Finance Ministry $25,000 a day for the delay in unloading the fuel. This means that we have to pay $312,000 to the company.”
Many energy experts have called on the successive governments to find cheaper alternatives to expensive fuel oil, warning that the electricity deficit had become the third largest budget expense after the cost of debt servicing and salaries of the government employees.
The source said that Khalil was not accusing the predecessors of wrongdoing or foul play.
He added that over the past five years the previous finance ministers had been compelled to release funds for fuel oil to spare the country from further power rationing.