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Lebanese citizens are being burdened with exorbitant electricity costs for an unreachable service! Electricité du Liban (EDL) charges 0.10 cents per kWh, significantly higher than the average of 0.179 cents per kWh worldwide. This infers that the public provider is charging a substantial fee for a service it only sporadically provides.
In Lebanon, the price of electricity had remained fixed at 0.001 cent per kWh since 1994 before experiencing a 100-fold increase to 0.10 cents this past November. In both scenarios, the population continued to receive electricity in a sporadic manner due to the endemic mismanagement of this vital sector. Tariffication is just one facet of this issue.
The land of the Cedars proudly possessed the world’s lowest kWh rate – which is not necessarily positive – in contrast to Croatia, which had the highest price at 1.226 USD per kWh. Today, this is no longer the case!
The electricity tariffs levied on the population, which still relies on generators, are the highest in the Arab world. Lebanese citizens pay 20 times more per kWh than in Syria, 10 times more than in Egypt, double the rate in Saudi Arabia, and almost as much as the rates in Spain (€0.15) or France (€0.22). That takes the cake, especially considering that the power plants are at a standstill and offer only a few hours of electricity each day. Additionally, Electricité du Liban (EDL) consistently cites financial constraints impeding the necessary maintenance, repairs and fuel purchasing. How do the others address this issue? The answer is simple: through management.
2023 Tariff Increase
Since November 1, 2022, EDL implemented a new tariff with the promise of enhancing daily electricity supply to up to 10 hours, a fact that the population has yet to witness!
The tariffication grid was revised downward once again in March, following the public outrage caused by excessively inflated bills for practically non-existent electricity. Thus, the first 100 kWh of consumption are charged at 10 cents per kWh, while consumption exceeding 100 kWh incurs a rate of 26 cents per kWh. The subscription cost stands at 15.75 cents per ampere, with a basic subscription fee of either $3.225 or $8.6, depending on the meter type. Of note, bills are issued in Lebanese pounds at the Sayrafa platform rate, increased by 20%.
Price comparison
To provide a comparative perspective, electricity prices in several countries are as follows in 2023:
United Kingdom: €0.4646 per kWh
Italy: €0.2375 per kWh
France: €0.2276 per kWh
Spain: €0.1518 per kWh
Australia: $0.229 per kWh
USA: $0.174 per kWh
Canada: $0.122 per kWh
Jordan: $0.090 per kWh
United Arab Emirates: $0.08 per kWh
Ghana: $0.072 per kWh
Saudi Arabia: $0.048 per kWh
Nigeria: $0.03 per kWh
Kuwait: $0.029 per kWh
Egypt: $0.01 per kWh
Syria: $0.005 per kWh
This seemingly endless financial sinkhole in Lebanon, known as EDL, has siphoned off approximately $45 billions from public funds since 1993, according to data from the Banque du Liban. These numbers closely align with estimates from the World Bank, which suggests that around 46% of Lebanon’s accumulated public debt since 1992 (totaling over $100 billion) can be attributed to transfers from the Treasury to EDL. However, electricity has consistently been provided sparingly. So, where have these astronomic funds disappeared to? This undoubtedly points to the pockets of more than a few individuals.
Tariffication: A Blatant Theft
According to a source closely monitoring the electricity file in Lebanon, the new tariffication for kWh and subscriptions is a blatant act of theft, characterized by numerous legal violations and breaches of the law. As per the same source, it is reported that action will first be taken with EDL. If no resolution is reached, the matter will be escalated to the Council of State.
The bills are astronomical and, notably, appear highly illogical given the limited hours of electricity supply. Consequently, citizens continue to persistently file complaints.
The Lebanese government’s foremost concern, having emptied the Treasury and squandered the resources of its citizens, appears to be primarily focused on increasing its revenue. This gives the impression that it is actively addressing the crisis that has gripped the country since 2020 while neglecting the crucial reforms urgently required from it.
In this vein, an opposition MP highlights that “electricity and other public services costs are now being primarily used as a means to generate tax revenue rather than fulfilling their intended service function.” He argues that EDL’s failure to privatize or transform into a company, despite the enactment of a relevant law in 2002, has turned it “from a service provider into a tax revenue source.”
“Public enterprises are mismanaged, with the revenues they generate going into the Treasury but failing to be reinvested to improve services. This is a glaring example of State inefficiency,” he vehemently asserts.
Indeed, starting in 2021, the energy market has witnessed a significant increase in electricity tariffs. In many European countries such as Germany and the Netherlands, electricity prices have doubled or even tripled. However, in Lebanon, they have multiplied by a staggering factor of 100 for a service that remains elusive.
