The decision to raise the price of a can of gasoline by $3.5, in addition to increasing the rate of value-added tax (TVA) from 11% to 12%, with the aim of financing an increase in the salaries of public sector employees, still raises widespread controversy due to its direct impact on the rise in prices.
But the most important question is: What is the expected actual increase in prices as a result of these measures?
In this context, the researcher at “Information International”, Muhammad Shams al-Din, explained that the increase in the price of gasoline naturally leads to an increase in prices, due to its direct impact on the cost of transportation, whether transporting workers or goods, which affects the prices of goods and services.
He also pointed out that the former Beirut Port Administration imposed a new fee of “46 dollars” on each container that passes through the new scanning device in the ports of Beirut and Tripoli, which will be collected starting from “February 26,” and the final consumer will bear this fee. He explained that these factors together lead to an increase estimated at about 5% in prices.
If it is approved to raise the value-added tax from “11%” to “12%,” he indicated that prices are expected to rise by approximately “7%.”
Based on these data, he confirmed that these measures together will lead to reducing the purchasing power of citizens by between “5%” and “7%.”
For his part, Head of the Food Importers Syndicate, Hani Bohsali, said that it is difficult to determine an accurate figure for the impact of these measures on prices.
He said: “We are evaluating the impact for each company, as the fleet of cars varies from one company to another, whether they operate on diesel or gasoline, and the impact of rising fuel prices on cars must be studied compared to trucks, which may not be affected in the same way.”
He added that the value-added tax will lead to a net increase of “1%” on each taxable product, but its impact extends to several components of the cost of the product and the company’s operation, which may double its impact to reach “2-3%.”
He pointed out that some economic experts expect the total increase to reach “10-15%.” Accordingly, work is still underway to determine the final figure, but it is certain that an increase of between “2-3%” will occur directly.
As for the head of the Syndicate of Supermarket Owners, Nabil Fahd, he confirmed that prices in supermarkets did not witness any increase, explaining that the reason was due to the supermarkets’ reliance on the prices of suppliers, who did not raise their prices.
He pointed out that the tour carried out by the Minister of Economy in cooperation with the Consumer Protection Directorate confirmed this reality after comparing prices. Fahd explained that when the value-added tax is increased by “1%,” the price increase is limited to “1%” only.
With regard to transportation, he stressed that all food transportation operations are carried out using diesel fuel, and since the price of diesel fuel has not increased, the operating cost at the factory and the importer remains constant, and thus prices in supermarkets will not be affected by the increase in gasoline, as gasoline is not included in the cost of operating a supermarket.
Until now, it is not possible to determine an accurate percentage of the rise in prices as a result of “ill-considered” decisions that adopted quick solutions instead of thoughtful plans, which makes the citizen, especially the poor, pay the price of failure.
How long will the citizen continue to bear this burden?
