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Senior Lebanese sources revealed that Baghdad refused to renew the agreement concluded with Beirut to supply Lebanon with quantities of “fuel” in exchange for services provided by Lebanon to Iraq, according to what the website reported. LebEconomy .
Lebanon signed an agreement with Iraq in July 2021 to import one million tons of fuel oil to alleviate the electricity crisis in the country, and the first ship arrived in Lebanon loaded with 31 thousand tons of this substance on September 16, 2021 .
The website quoted these sources as saying that the non-renewal of the agreement is due to purely financial reasons, and is directly related to the Bank of Lebanon’s refusal to open a credit to provide services to Iraq worth $700 million new without any real guarantees that the state will pay these amounts .
She explained that Lebanese President Najib Mikati went to Baghdad hoping that the Iraqi side would accept canceling the funds owed to Lebanon as a result of this agreement ($700 million), which Lebanon had committed to providing in the form of services to the Iraqi side .
Fuel is a mixture of oils that remain in the oil refining unit after distillation (heavy fuel) and is burned in a furnace or boiler to generate heat or generate electrical or kinetic energy .
According to the sources, Prime Minister Muhammad Shiaa Al-Sudani agreed to renew the agreement with an additional 700 million dollars under the same conditions, without canceling the effects of the first agreement, and thus the total value owed by Lebanon to Iraq amounted to one billion and 400 million dollars .
It also indicated that the Bank of Lebanon rejected the government’s request to open a second account for the government worth $700 million to cover the service requirements of the Iraqi government in exchange for Iraqi fuel .
The sources continued to say that the acting Governor of the Bank of Lebanon, Wassim Mansouri, insisted on rejecting this issue, given that the services that will be provided to the Iraqi side by Lebanon will be paid for by the Lebanese parties that will carry them out in cash, either in pounds or dollars, and this means arranging expenses worth 700 million dollars. At the Bank of Lebanon, “This is absolutely unacceptable, in violation of the Monetary and Credit Law, as well as the Bank of Lebanon’s decision not to give any loans to the Lebanese state .”
Iraq and Lebanon agreed on an energy exchange, under which Iraq would provide Lebanon, which is going through the worst economic crisis in its history, with heavy fuel oil, in exchange for “services and goods” that Iraq would receive from Lebanon .
In August 2022, the Iraqi Council of Ministers approved the extension of the agreement to sell fuel oil to Lebanon, explaining that this decision comes in response to the difficult circumstances that the Lebanese are going through .
Meanwhile, the website said in a report published yesterday, Sunday, that the power supply was cut off completely and comprehensively in all Lebanese regions after the Electricité du Liban announced at noon the day before yesterday, Saturday, that “the last production group of the Zahrani plant remaining on the electrical network was forcibly completely out of service due to the depletion of the plant’s storage.” Of the gas oil completely, which resulted in the complete cessation of electricity supply to all Lebanese territory, including the basic facilities in Lebanon (airport, port, water pumps, sewage, prisons, etc.).”
