The Lebanese government has invited new companies to tender for fuel imports after the companies currently prequalified to tender claimed they had not been able to obtain the letters of credit (L/Cs) they needed to pay for fuel.

Importers are finding it increasingly hard to obtain L/Cs due to the country's severe US dollar shortage.

Competitive market

Lebanon's caretaker minister of energy, Nada Bustani, recently postponed a fuel tender to import gasoline by one week "to pave way for more competition."

"We decided to get involved when the current oil companies said they were incapable of opening L/Cs [in US dollars to import fuel] from the bank," she said.

L/C woes

Recently it emerged that Lebanese farmers were calling for the Central Bank of Lebanon to allow them to use euro denominated L/Cs at a regular market rate to import potato seeds (DC World News, 4 December 2019).

Lebanon's currency is pegged at around 1,500 Lebanese pounds to the US dollar, and both are used interchangeably in everyday transactions.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.