Beirut – “Lebanon Debate” (Bassma Atwi)
The price of a can of gasoline in Lebanon is $31, with expectations of a further rise as a result of continuing political and security tensions in the Gulf region. These prices are directly reflected in the daily lives of the Lebanese, especially in transportation and securing basic needs, in light of their suffering from “multidimensional poverty” since the outbreak of the financial collapse in 2019.
In the absence of an effective public transportation network, the car in Lebanon is no longer a traditional means of transportation, but rather has turned into a financial burden that puts pressure on family budgets and the national economy. This cost is not limited to the purchase price or fuel filling only, but includes a wide network of direct and indirect expenses.
Experts estimate the total economic cost associated with cars in Lebanon at approximately $6 billion annually. This cost is distributed among several items, most notably the import of cars and spare parts, maintenance, insurance, fuel, in addition to other costs.
The import bill for cars, spare parts, and related items accounts for about $1.7 billion, while the cost of maintenance and services is estimated at about $600 million annually, and the cost of insurance amounts to about $300 million.
Fuel is the largest component of this bill, as the cost of gasoline ranges between $2.5 and $3 billion annually at current prices. In addition, there are indirect costs such as traffic congestion, wasted time, traffic accidents, pollution, and parking fees.
From an economic standpoint, experts differentiate between “total cost” and “net drain of foreign exchange.” Not all expenses related to cars are an outflow of dollars, as part of them goes to cover wages, services, revenues and taxes within the local market. On the other hand, the import of cars, spare parts, and fuel puts direct pressure on foreign currency budgets and the balance of payments.
Amid these challenges, there is an urgent need to develop the public transportation sector as a vital economic tool to reduce transportation costs, reduce fuel consumption, reduce congestion and pollution, and reduce dependence on private cars.
Experts confirm that establishing an effective and comprehensive public transportation system contributes to saving a large portion of these burdens. In a country suffering from accumulated living and economic crises, reforming the transport sector is no longer just a service project, but rather a necessity within economic policy to reduce the drain on household expenses and the national economy.
