“Lebanon Debate”
The Lebanese industry is witnessing one of the most difficult stages in its history, in light of the continuous rise in global oil prices, and the resulting doubling of the cost of operating private electric generators, in conjunction with the disastrous repercussions of the war on Lebanon, which hit the productive and export sectors to the core, amid the absence of any actual support plan from the Lebanese state.
In an interview with “Lebanon Debate,” former Minister Fadi Abboud confirmed that “no one had taken into account this significant rise in fuel prices, whether in the industrial or agricultural sector, especially since agriculture also depends heavily on refrigerators and electric generators,” noting that “the cost of operating generators has almost doubled, and this matter has left a very, very negative impact on various sectors.”
He pointed out that the crisis is not only related to the rise in oil prices, but is accompanied by other problems that Lebanon suffers from, most notably export and shipping costs, explaining that “many Lebanese goods were unable to reach Kuwait or several Arab countries, and some shipments were forced to remain in international ports before being returned to Lebanon, which caused great losses, as the cost of returning one container to Lebanon reached more than $6,000, before being shipped again to the destination for which it was originally intended.”
Abboud added: “Everyone knows the extent of the problems we are experiencing, but the most important question is: What has the Lebanese state done to help industries so that they can continue? Unfortunately, it has done nothing at all.”
He pointed out that the state could have started with simple steps by communicating with Lebanese shipping companies, “which are considered respectable companies,” and working with them to reduce the costs of returning goods to Lebanon or reducing the cost of export as much as possible, even if prices had risen naturally as a result of the crisis, “but at least the burdens on industrialists could have been reduced.”
He continued: “What is more terrible than that is that there are Arab countries, led by Iraq, that were and still are ready to help Lebanon, as they did previously with the Electricité du Liban, and we were hoping that the relevant ministers would open the door to cooperation with Iraq to import diesel for the Lebanese industry at reasonable prices, not for free, but at prices that allow factories to withstand and overcome this difficult stage.”
He explained that some industries are classified as “energy-intensive industries,” as the cost of energy constitutes between 30 and 40% of the total cost of production, including plastic and aluminum industries, in addition to agricultural industries that rely on refrigerators and freezers that operate entirely on private generators.
Abboud considered that “the official reaction to the tragic situation is completely non-existent, and even those who want to help do not know what to do,” pointing out that the state could have intervened and imported fuel directly, stored it, and then sold it to industrialists at reasonable and reasonable prices, especially since the Industrialists’ Association has precise studies on each factory’s need for diesel, “which prevents any exploitation or illegal trade in these materials.”
He added: “This type of step could have allowed factories to continue and resist until global oil prices returned to their normal levels, but unfortunately nothing of the sort happened.”
Abboud revealed that a large number of factories were forced to stop production or reduce it to a minimum, because “the cost of production has become higher than market prices,” explaining that other countries of the world have not witnessed a similar rise in electricity and energy prices as happened in Lebanon, while factories in Turkey, China, and others still obtain electricity at approximately the same prices that existed before the war.
He pointed out that “many Arab countries, such as the UAE and Saudi Arabia, still support fuel and electricity for the industrial sector,” which made competition almost impossible for Lebanese factories.
He added: “There are factories that have reduced their production to a minimum, and there are other factories, including me, that have begun importing finished goods from abroad because importing has become cheaper than local manufacturing.”
As for the repercussions of the Israeli war on the south, the Bekaa, and the southern suburbs, Abboud confirmed that “many factories stopped production completely, especially the factories of the south, Sidon, and their surroundings, not only because of the rise in fuel prices, but also as a result of the security conditions.”
He concluded by stressing that the damage to the industrial sector is “very great and perhaps more dangerous than ever before,” because the Lebanese industry depends almost entirely on private generators to secure electricity, warning that the continuation of this reality without any official intervention will lead to more closures and the loss of an essential part of the Lebanese production capacity.
