BEIRUT: Lebanon’s new government raised gasoline prices on Friday, cutting a subsidy that Prime Minister Najib Mikati termed unaffordable as he advances plans to address a devastating financial crisis.

The government also signed a new contract with restructuring consultancy Alvarez & Marsal to carry out a forensic audit of the central bank.

Fuel prices issued on Friday raised the gasoline price by more than 37 percent with immediate effect.

The price of a 20-liter canister of unleaded 98-octane gasoline now ranges between 174,000 and 180,000 Lebanese pounds ($13). On the black market, 20 liters are sold for 600,000 Lebanese pounds.

The Ministry of Energy issued on Friday a price list for liquid fuels based on the exchange rate of the central bank’s Sayrafa platform.

This means that Lebanon has entered the last stage before lifting subsidies on gasoline after the subsidy on diesel was completely lifted.

The exchange rate on Sayrafa is 12,000 Lebanese pounds to the dollar, while the black market rate dropped to 13,000 Lebanese pounds to the dollar on Friday morning. It began picking up again in the afternoon, reaching 14,200 Lebanese pounds to the dollar.

Queues at gas stations were especially long over the past 24 hours, with the postponement of the pricing process delaying the opening of hundreds of gas stations.

“The liberalization of gasoline imports means that the process has become purely technical; companies import and secure goods for the country as they did many years ago. The central bank no longer has anything to do with the issue of securing dollars,” said Georges Fayyad, who heads the Association of Petroleum Importing Companies in Lebanon.

This measure came the day after the first shipment of Iraqi fuel arrived in Lebanon. The 32,000 ton-shipment is being unloaded in the tanks of Electricité du Liban, and the second shipment of grade B fuel will arrive next week.

A source in the EDL said: “The EDL is expected to be able to increase the power supply by about four hours,” bearing in mind that households only get one or two hours of EDL power a day.

Owners of private generators practice harsh rationing on subscribers due to the scarcity of diesel. Bills have doubled: Five amps per month costs over 1.5 million Lebanese pounds, more than double the minimum wage.

Eighty Syrian tankers loaded with Iranian diesel entered Lebanon through Hezbollah’s illegal crossings with Syria this week, evading state control and violating state sovereignty.

Druze leader of the Progressive Socialist Party, Walid Jumblatt, sarcastically tweeted: “We no longer know where the convoys of diesel, gasoline and oil come from. We now have so many enthusiasts that we may become an oil-exporting country without demarcation of borders or exploration.”

George Brax, a member of the gas station owners’ syndicate, said: “The Iraqi fuel will contribute to reducing the demand for diesel to generate electricity, and lifting the subsidy will reduce demand on the black market. As for Iranian diesel, it contributes to alleviating the crisis, but it is only temporary since Hezbollah cannot continue importing fuel into Lebanon.”

The government signed a new contract with A&M to carry out a forensic audit of the central bank, a step sought by donors who want to see Beirut enact reforms to unlock badly needed aid.

Finance Minister Youssef Khalil, formerly a senior central bank official, signed the contract with A&M, which the ministry said would present an initial report within 12 weeks of its team starting work.

A&M withdrew from the audit last November, saying it had not received the information it required. The Finance Ministry said in April the central bank had agreed to hand over required documents.

Parliament Speaker Nabih Berri announced that a public session would be held on Sept. 20 to discuss the ministerial statement of Najib Mikati’s government and pass a vote of confidence.

In a statement, Mikati’s government stressed that it is “committed to resuming talks with the International Monetary Fund based on priorities and what the national interest requires.”

It also noted that it wants to implement “reforms in the banking sector and restructure it as necessary.”

The IMF talks were stalled last year when politicians and bankers questioned the extent of financial losses identified in the financial recovery plan put in place by the government at the time.

The EU is threatening Mikati’s government with sanctions until it fulfills the promises made to implement the reforms required by the IMF and the international community.