Central Bank stops subsidy
of lira exchange rate for fuels

New prices to be determined by the Ministry of Energy

The Central Bank (BDL) has informed authorities and the public that it will no longer execute documentary credit destined to purchase fuels at preferential exchange rates. BDL will use market rates to exchange liras for dollars for fuel procurement operations.

BDL, which had applied the official rate (LL1,507 per USD) for decades, increased in June the rate to LL3,900 per USD.

The Governor of the Central Bank informed the Higher Defense Council, meeting on Wednesday, that BDL could no longer subsidize fuel purchases. In a statement published later that day, BDL said that the Ministry of Energy will be responsible for pricing fuel products.

Market estimates placed the price of 95 octane gasoline at LL16,800 per liter including taxes and VAT, up from LL3,900. The consumer price of diesel fuel (mazout) would increase to LL13,900 from LL2,855.

“If the fuel subsidy stops, the price will be liberated and become unified,” said Minister of Energy Raymond Ghajar.