#Iraq #fuel #Lebanon #year #Lebanon
Iraq has agreed to renew a one-year contract to supply Lebanon with fuel for its power plants in exchange for in-kind contributions, the Lebanese prime minister said in a statement on Thursday.
Iraq signed an agreement in July 2021 to give cash-strapped Lebanon a million tons of fuel oil to keep the lights on as the country grapples with power outages for up to 23 hours a day during an unprecedented economic crisis.
“The Iraqi government, headed by Mr. Mustafa al-Kadhemi, agreed at a meeting today to extend fuel supplies to Lebanon… for a period of one year, under the same conditions as before,” Lebanese Prime Minister Das shared Office of Najib Mikati with.
Last year, Lebanon’s power plants depended on the deal with Iraq to produce one to two hours of electricity a day.
The rest of the time, residents of the poverty-stricken country largely rely on expensive private generators.
The Iraqi oil cannot be used directly by the Lebanese power plants, so Beirut will continue to buy compatible fuel from other suppliers who will receive the Iraqi oil in exchange.
At the time of signing, last year’s deal was valued at $300 million to $400 million, Raymond Ghajar, then energy secretary, had said.
As fuel prices have skyrocketed, the deal is now valued at an estimated $570 million, Lebanese Energy Minister Walid Fayad told AFP last month.
An Iraqi ministerial delegation is expected to visit Beirut shortly to agree on the kind of donations Baghdad wants in return for the fuel, Fayad said.
Iraq is a member of the Organization of the Petroleum Exporting Countries (OPEC), but suffers from its own electricity shortages.
Lebanon is grappling with one of the world’s worst economic crises since the 1850s, and the state-owned electricity company is facing dire liquidity constraints.
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