Fuel prices slip, cooking gas rises, and the deposits-and-tax dispute heats up
Price indicators moved in opposite directions today: the price of a 95-octane gasoline canister fell to 2,492,000 lira and diesel to 2,579,000 lira, while a 10 kg cooking gas cylinder rose to 1,610,000 lira. Meanwhile, the deposits file remains at the center of events, with an escalating dispute between the Association of Banks and the Ministry of Finance over amended tax declarations and burdens estimated at about $600 million. On the cost-of-living front, a decision to reduce the weight of the bread bundle has drawn union objections, and the electricity file is seeing a review of tariffs. Added to this are warnings of unemployment affecting two-thirds of young people, which bears directly on household income.
Fuel slips, cooking gas rises, and bread is at stake
Fuel derivative prices declined: a 95-octane gasoline canister fell to 2,492,000 lira from 2,569,000 lira, 98-octane to 2,510,000 lira from 2,587,000 lira, and diesel to 2,579,000 lira from 2,604,000 lira. By contrast, a 10 kg cooking gas cylinder rose to 1,610,000 lira from 1,545,000 lira. As for bread, the decision to reduce the weight of the bundle drew union objections describing it as a de facto price increase that directly affects food security for the poorest, with calls to review the pricing mechanism and disclose actual production costs.
Banks vs. Finance: $600 million at depositors' expense
The confrontation between the Association of Banks in Lebanon and the Ministry of Finance is escalating after the association rejected the ministry's demand to amend tax declarations for 2020 to 2024, warning of burdens approaching $600 million that could move part of the funds earmarked for depositors into the Treasury. Banks insist that gains from revaluing accounts due to exchange-rate changes are differences, not profits, according to reports. In parallel, the IMF said a team will visit Beirut to push banking-sector restructuring talks, and that agreeing a support program for Lebanon still requires major reform progress. The deposits recovery file remains without a clear executive plan, per reports, while President Joseph Aoun discussed the financial stability and deposit recovery bill with central bank governor Karim Saidé. On prices, the euro stood at 99,875 lira from 100,508 lira, and the official dollar rate at 89,500 lira.
Youth unemployment and the cost of schooling for families
Reports addressed Lebanon's youth unemployment crisis with figures described as shocking, indicating that two-thirds of Lebanese youth are without work, placing a whole generation before a growing risk. At the household level, MP Edgar Traboulsi raised the cost of school transport for families unable to bear it, within the debate over a project to provide breakfast meals for 112,000 students in public schools. That project is being implemented by foreign donors rather than the ministry, according to Education Minister Rima Karami in a parliamentary education committee session.
Electricity: tariff under review and $28 million collected
Prime Minister Nawaf Salam discussed with the new board of Électricité du Liban, headed by Nassib Nasr, ways to revive the institution, particularly the tariff file and raising productivity. Nasr announced a review of the electricity tariff and a moving mechanism to set it, and said cutting supply to public institutions that failed to pay generated immediate revenues of $28 million out of outstanding dues totaling $298 million. This is alongside a Qatari project to raise generation capacity toward 2,980 megawatts and a World Bank offer of a $250 million loan. On health, Industry Minister Joe Issa El Khoury noted that Lebanon still imports more than 70% of its medicines, while a national campaign to support Lebanese-made medicine was launched.
A budget without new taxes, and spending on paper under scrutiny
The head of the Finance and Budget Committee, MP Ibrahim Kanaan, announced that discussion of the budget articles had been completed, stressing rejection of tax increases in a contracting economy where depositors' funds are held in banks, and noting that the suspended articles concern existing fees that ministries proposed amending. Finance Minister Yassine Jaber said the 2027 draft budget aims to strengthen revenues and improve financial management without imposing new taxes, warning that delayed support raises the cost of recovery. In contrast, researcher Khaled Saad of the Tomorrow's Policies Initiative criticized the tax policy, saying 80% of its taxes are on consumption and describing the budget as "bookkeeping". Separately, Lebanese Customs is seeking to increase its headcount, improve oversight and combat smuggling.
What to watch
- The IMF team's visit to Beirut for banking-sector restructuring talks and the extent of reform progress.
- Developments in the dispute between the Association of Banks and the Ministry of Finance over tax declarations and the $600 million burden.
- Any change to the electricity tariff and its setting mechanism, along with results of collecting the utility's dues.
- The fate of the decision to reduce the weight of the bread bundle and reactions from unions and concerned parties on the pricing mechanism.