From fuel to food: Global energy crisis deepens cost pressures in Lebanon

Report by Petra Abou Haidar, English adaptation by Mariella Succar

Lebanese households are facing another surge in living costs as the war in the Middle East and the closure of the Strait of Hormuz drive up global energy prices, adding pressure to already strained incomes.

Unlike Lebanon’s 2019 economic crisis, the latest price shock is global. But Lebanese citizens are entering it after years of financial hardship, with salaries struggling to keep pace with rising expenses.

According to World Bank estimates, energy prices are expected to rise by about 24% this year, while overall commodity prices are projected to increase by around 16%. Global inflation is also expected to climb from 3.3% last year to about 4% this year.

Higher energy prices have a direct impact on everyday expenses in Lebanon. Rising diesel prices increase private generator bills, while higher gasoline prices push up transportation costs. More expensive energy and transportation also raise operating costs for businesses, schools, factories and retailers, with much of the burden ultimately falling on consumers.

With the crisis expected to persist, households are being forced to reassess their spending, prioritize essential expenses and reduce energy consumption where possible.

But the burden does not fall on citizens alone. Other countries have introduced measures to cushion the impact of rising costs. France has provided cash assistance to low-income households and extended support to affected sectors, while Singapore has approved financial aid and fuel vouchers for transportation workers.

Greece has supported affected businesses and helped cover fuel and heating costs. Germany has reduced taxes on gasoline and diesel, while Spain has cut electricity taxes and provided fuel support to specific sectors.

Lebanon may not be able to shield citizens entirely from a global crisis, but measures to ease the financial burden, identify alternatives and limit the impact of rising prices could offer some relief to households already struggling with years of economic hardship.