Lebanon Sets May Private Generator Rates Based on Diesel Costs

Lebanon's Ministry of Energy and Water has announced the tariff structure for private generator subscriptions during May, calculated according to diesel fuel prices and operational expenses tracked during that period.

The pricing framework distinguishes between two categories of consumers. For metered subscribers in urban centers and densely populated zones at elevations below 700 meters, a 5-amp capacity connection carries a fixed monthly charge of 385,000 LBP plus 46.289 LBP per kilowatt-hour. A 10-amp capacity costs 685,000 LBP fixed, with the same per-kilowatt-hour rate applied. For rural or remote areas and locations above 700 meters elevation, the fixed charges remain identical, but the variable rate increases to 50.918 LBP per kilowatt-hour. Additional 5-amp increments incur an extra 300,000 LBP added to the fixed component.

The ministry based these calculations on a diesel can (20 liters) averaging 2,305,205 LBP during May. The computation incorporates generator maintenance costs, including oils and filters, alongside operational expenses and a margin for generator owners. The calculation also factors in fuel distribution costs from gas stations to generators, as well as the average parallel market dollar rate for May, which stood at 89,700 LBP.

The pricing methodology follows a calculation table approved by the Ministry of Energy since October 2010. It implements Cabinet Resolution No. 2 from December 2011 regarding private generator price controls, and operates under a joint coordination mechanism between the Energy and Economy ministries established in December 2011. This framework mandates that the Ministry of Energy and Water issue updated pricing based on monthly diesel prices.

The Ministry of Energy and Water has notified the Interior and Economy ministries of May's rates to ensure compliance with the established control mechanism. The ministry emphasizes that generator owners must install meters as required by the Economy Ministry's decision.

The ministry explicitly prohibits several additions to its guideline pricing: value-added tax lacking proper legal justification or TVA registration at the Finance Ministry; supplementary charges for generator maintenance, network costs, or other pretexts; and additional fees for consumers combining solar energy systems with private generators.

The ministry has appealed to consumer protection authorities, particularly the Economy Ministry, to enforce strict adherence to the official pricing and pursue maximum penalties against violators with support from the Interior Ministry, municipal authorities, and relevant judicial bodies.

The ministry indicated it would conduct a comprehensive review in coming months to refine the pricing formula, accounting for currency fluctuations and the evolving economic and social circumstances of citizens while considering generator owners' operational needs. The detailed pricing composition table has been made available on the ministry's official website.