November 27, 2019 / 5:19 PM / 16 days ago

Crisis-hit Lebanon faces petrol station strike on Thursday

BEIRUT (Reuters) - Petrol stations in Lebanon will begin an open-ended strike on Thursday nationwide, a union representative said on Wednesday amid the country’s worst economic crisis in decades.

Protests since Oct. 17 have pulled Lebanon deeper into economic crisis, worsening a hard currency crunch that has hit importers and raised fears of price hikes and shortages.

In a statement carried on state news agency NNA, the petrol stations union said it was striking because of losses incurred from being forced to purchase dollars on a parallel market, the primary source of hard currency in economic hard times.

Petrol stations must collect payments from customers in Lebanese pounds but pay private fuel importers in dollars.

The cost of dollars on the parallel market has surged since the start of protests, hovering currently at about 40% more than the official pegged rate, set at 1507.5 Lebanese pounds since 1997.

There were queues at some petrol stations in Beirut late on Wednesday but the situation remained relatively calm.

The central bank said last month that it would prioritize foreign currency reserves for fuel, medicine and wheat, but buyers tapping the facility are still required to supply 15% of their own dollar needs.

Lebanon’s energy ministry sets guidelines for gasoline price levels. The ministry said it would test a state tender for gasoline next month after fuel distributors threatened to raise prices.

The Lebanese Economic Bodies, a private sector group that includes industrialists and bankers, called off a separate three-day strike that was also to start Thursday, citing tough economic conditions and the need for employees to collect end-of-month salaries.

Reporting by Eric Knecht and Reuters TV; Editing by Angus MacSwan and Grant McCool

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