Fuel importing companies will hold a press conference on Wednesday at 3 PM to explain the reasons behind the decision taken on the previous day to suspend the delivery of gasoline, diesel and gas starting the following day. They contest the "exceptional tax" of 10% imposed on the total turnover of oil importing companies over a period of two years, 2020 and 2021, as part of the Budget for the fiscal year 2024.
The decision taken on Tuesday evening by fuel importing companies to suspend the delivery of gasoline, diesel and gas starting the following day, and to cease importing once the stock is depleted, has revived bad memories of the fuel shortage among a large part of the population, back in the summer of 2021. Thus, on Wednesday morning, from the early hours of the day, long lines of cars formed at several gas stations, with people hoping to fill up their vehicles.
Fuel importing companies explain that this decision was taken as a protest against the "fine or exceptional tax" imposed on them as part of the Budget for the fiscal year 2024, approved last Friday by Parliament. These companies believe that this tax was hastily drafted and was not mentioned in the budget bill presented by the parliamentary Finance and Budget Committee. They argue that "approval of the exceptional tax will lead to the destruction of the sector."
The president of the Association of Oil Importing Companies, Maroun Chammas, explains to This Is Beirut that "this retroactive tax represents a percentage of 10% on the total turnover of oil importing companies over a period of two years, 2020 and 2021, when gasoline was subsidized by the Lebanese government." "This is about $800 million," he protests, before calling on the government to "repeal the law and acknowledge that it is a mistake."
Chammas thus calls for "penalizing" those who benefited from the subsidy and "shipped gasoline outside Lebanese borders." However, he assures that gas stations have gasoline stocks and will be able to sell to consumers. "If a solution is found, deliveries will resume as early as tomorrow, Thursday," assures Chammas, who is expected to hold a press conference on Wednesday at 3 PM to explain the reasons behind the decision.
For him, the occurrence of a fuel crisis is "in the hands of the authorities." He recalls that "the beneficiary of the subsidy is the citizen, not the companies, as it was the state that supported the exchange rate of the dollar." "We are really surprised by the imposition of a tax on the turnover of companies," says Chammas.
He also emphasizes that representatives of fuel importing companies sought clarification from the relevant authorities but "have still not received a satisfactory response." "What we know is that many deputies were not aware of the content of the clause related to this exceptional fine," he says.
A gas station owner assures to This Is Beirut that the available stocks in stations may be sufficient for two or three days, as they currently meet the growing demand from consumers who fear a shortage. He believes that this strike is "a kind of pressure to make consumers bear part of the tax through an increase in the price of 20 liters of gasoline."
For his part, Georges Brax, a member of the syndicate of gas station owners, called on citizens not to rush to gas stations and to act normally, as "this could worsen the problem."
Meanwhile, the representative of fuel distributors in Lebanon, Fadi Abou Chakra, confirmed that gasoline is available and that they will continue to distribute it to stations that remain open.
As a reminder, between 2020 and 2021, the importation of certain products, including fuel, benefited from subsidies from the Central Bank of Lebanon (BDL), which allowed for obtaining currencies at a preferential rate lower than that of the parallel market. These were gradually abolished. The 2024 budget plans to impose an exceptional tax on companies that benefited from these preferential rates.
Association of Petroleum Importing Companies Announces Strike Following 2024 Budget
The Association of Petroleum Importing Companies declared its refusal of the new 2024 budget, which imposes a 10% tax on its total turnover. This paints a worrying picture for Lebanese people who… pic.twitter.com/lT3PeQtfcO
— This is Beirut (@ThisIsBeirut_)Association of Petroleum Importing Companies Announces Strike Following 2024 Budget
The Association of Petroleum Importing Companies declared its refusal of the new 2024 budget, which imposes a 10% tax on its total turnover. This paints a worrying picture for Lebanese people who… pic.twitter.com/lT3PeQtfcO— This is Beirut (@ThisIsBeirut_) January 31, 2024
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