Algeria Offers Aid in Exchange for Closing the Case of Defective Fuel

Algeria aims to resolve the defective fuel case with Lebanon by sending 30,000 tons of fuel oil to Beirut to alleviate its power crisis, worsened by the ongoing Israeli conflict.

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This Algerian initiative comes as the Lebanese government prepares to announce the closure of the lawsuit against Sonatrach, which was accused in 2020 of supplying Lebanon with non-compliant fuel shipments worth $3 billion.

Lebanese Energy Minister Walid Fayad revealed in November to the platform “Al-Taqa” that his ministry is working to develop partnerships with Algerian institutions while supporting government efforts to rebuild ties in a legal framework that serves both countries’ interests.

In October, Lebanese Prime Minister Najib Mikati held a meeting with several officials to explore legal solutions to the case.

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Lebanon has suffered from power outages since the 1990s. Massive financial transfers to the state-run Electricité du Liban (EDL) to cover chronic losses have added tens of billions of dollars to the country’s national debt.

Electricity production in Beirut used to range between 1,600 and 2,000 megawatts per day, but fuel shortages in recent years have caused production to plummet to unprecedented levels.

Due to financial constraints, Lebanon has imposed strict energy rationing for decades. Political infighting has hindered reforms in the electricity sector, and outages have worsened during the current economic crisis.

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In August, Algeria pledged to immediately supply Lebanon with fuel to operate power plants after EDL announced it had run out of supplies, affecting critical facilities such as Rafic Hariri International Airport, the Port of Beirut, prisons, sewage systems, and drinking water pumping stations.

The defective fuel scandal dominated Lebanese headlines in April 2020, when authorities arrested Sonatrach’s representative in Lebanon, Tarek Al-Fawal, along with 16 others, over a shipment of substandard fuel intended for EDL.

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Since January 2006, Sonatrach has been bound by an agreement with Lebanon’s Ministry of Energy to supply diesel and fuel oil, which it sells to EDL through two companies, including the Lebanese firm ZR Energy.

Lebanese citizens have risen against their ruling class over widespread corruption, exacerbating an economic and social crisis that has pushed the country to the brink of bankruptcy.

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