Impact of Oil Price Drop on Lebanon’s Economy & Petroleum Sector

The fall of crude oil prices by 50 percent since June is seen to largely benefit oil-importing economies and to challenge oil exporters. In the case of Lebanon, an energy importer and aspiring energy exporter, there are mixed effects on its broader economy, and vital lessons as it works to launch its oil and gas industry.

On the economic front, the World Bank highlighted in a recent report the primary benefit of the oil price drop to come from a lower fuel bill for the national electricity company, Electricité du Liban. This is significant given that in the past four years exceptionally high oil prices have cost the Lebanese government, on average, an astounding 4.7 percent of GDP to maintain electricity prices constant, by covering any price difference above $23 per barrel.

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