Iraq halts fuel shipments to Lebanon over non-payment
Iraq halts fuel shipments to Lebanon over non-payment
2024-07-11 01:40
Shafaq News/ The Lebanese Minister of Energy and Water, Walid Fayyad, explained that the Iraqi Oil Marketing Company (SOMO) has stopped unloading fuel tankers exported to Lebanon due to non-payment of the due funds for the second year in a row.
Fayyad said, “For the fifth consecutive month, the Central Bank of Lebanon has not transferred the price of fuel shipments to the Iraqi government’s account, and thus Lebanon becomes financially exposed to Iraq, as the due funds have not been transferred for the second consecutive year,” according to the Lebanese newspaper Al-Akhbar.
He added, “If the problem of financing Iraqi fuel shipments is not addressed quickly, Lebanon will enter a complete darkness within three days,” indicating that “the problem is known to everyone: we have to pay the price of the fuel, and any bet that Iraq will exempt Lebanon from this price is misplaced.”
He pointed out that “the essence of the problem is that the agreement with Iraq needs to be legalized in the Lebanese Parliament to allocate appropriations in the budget, allowing the Bank of Lebanon to pay the price of the shipments into the Iraqi account. Otherwise, the acting governor of the Bank of Lebanon, Wassim Mansouri, refuses to take any financing step that violates the law.”
Fayyad explained, “According to official correspondence between the Lebanese administrations (energy, finance), the Central Bank of Lebanon transferred only $118 million to the Iraqi bank’s account, after which the Central Bank stopped transferring the funds due for four fuel shipments, worth $132 million for the year 2023.”
He continued, “The conditions for implementing the transfers are the issuance of a law by the House of Representatives to cover them, and the inclusion of appropriations in the 2024 budget, noting that the number of shipments received and due for payment for the year 2023 amounted to 8, and there are 12 other shipments for the year 2024, of which 2 have arrived, but their price has not yet been due.”
Lebanon signed an agreement with Iraq in July 2021 to import one million tons of fuel oil to alleviate the country’s electricity crisis, and the first ship arrived in Lebanon carrying 31,000 tons of this material on September 16, 2021.
Fuel oil is a mixture of oils that remain in the oil refining unit after distillation (heavy fuel) and is burned in a furnace or boiler to generate heat or to generate electrical or kinetic energy.
Iraq and Lebanon agreed to exchange energy, under which Iraq will provide Lebanon, which is going through the worst economic crisis in its history, with heavy fuel oil, in exchange for “services and goods” that Iraq will obtain from Lebanon.
In August 2022, the Iraqi Council of Ministers approved the extension of the agreement to sell fuel oil to Lebanon, explaining that this decision comes in response to the difficult circumstances that the Lebanese are going through.
shafaq.com
