REGULATORY · MARKET STRUCTURE · LEBANON
Lebanon raises petrol levy and VAT to 12%
Change
Lebanon’s cabinet increased petrol taxes by 300,000 Lebanese pounds per 20 litres and raised VAT by 1 percentage point to 12%.
Why it matters
The tax changes directly lift transport and retail input costs, creating near-term price adjustments across fuel-dependent services and imported goods. VAT’s increase broadens the impact beyond fuel, raising the tax burden on most consumer transactions and tightening margins for merchants that cannot fully pass through costs. The measures have already triggered street protests (including taxi-driver actions) and widened criticism of the government, increasing disruption risk for mobility and commerce in Beirut and other hubs. With many households reliant on remittances and facing high living costs, the tax hike concentrates pressure on consumption and informal coping mechanisms. The backlash also raises execution risk for further fiscal measures that depend on public compliance and political support.
Implications
- • Higher transport fares and delivery costs feed into retail pricing
- • VAT increase raises transaction costs across most consumer spending
- • Protest activity increases disruption risk for roads and commerce
- • Government faces higher political friction for additional fiscal steps
Who is affected
- • Fuel retailers and importers
- • Transport operators (taxi, bus, logistics)
- • Consumer-facing merchants and retailers
- • Lebanese households reliant on wage income and remittances
Source
Topics
World & Politics Policy & Regulation Trade & Tariffs Business & Markets Economy