Libya: PM pushes to end petrol subsidies despite protests
Libya’s government intends to lift petrol subsidies despite ongoing protests, according to The National on January 12th.
The decision is expected to worsen public anger and instability in the country, following the recent closure of oil facilities due to protests.
READ: Libya: Protests result in two oil field closures
In a meeting with the country’s hydrocarbons committee, PM Abdul Hamid Dbeibah claimed the move is intended to tackle petrol smuggling and its impact on Libya’s state budget.
The PM emphasised the toll that the country’s 50% petrol subsidies are taking on its finances and resources, with allocated subsidies having exceeded $12 billion in 2022. The cost almost doubled from $7 billion in 2021 and resulted in the oil-rich country increasing petrol imports by 19%, to maintain domestic market stability.
Dbeibah claimed petrol smuggling to neighbouring countries has resulted in fuel shortages in Libya’s border regions, with a recent study showing loses in excess of $750 million annually.
Libya currently boasts the world’s second lowest crude oil and diesel prices, each at $0.03 per litre according to the Global Petrol Prices online tracker.
The lifting of subsidies will massively affect Libyans’ purchasing power, with an average public sector salary at only $240. The World Bank reports that Libya’s public sector accounts for 85% of employment within the country.
If the subsidies are lifted, rising petrol prices present risk to stability in Libya. Several of the country’s oil facilities have already halted operations due to protests, with demonstrators calling for infrastructure and health sector developments, and jobs for the unemployed youth.
The recent closure of its Sharara oil field alone resulted in a 300,000 barrels-per-day drop in crude oil production.
Libya has witnessed over a decade of conflict following the fall of Muammar Gadhafi’s regime in 2011. Now it is governed by rival administrations backed by various militias and foreign powers, in Tripoli and Benghazi.
PM of the Benghazi-based administration in the East of the country Osama Hamad has criticised Dbeibah, saying lifting of subsidies would not be considerate to the needs of Libyan society.
READ: Libya: sporadic fighting gives Haftar town to Tripoli regime
He stated: “Such decisions cannot be taken by any party in such a hasty manner and without the conducting the necessary studying of their consequences, dimensions and damages.”
Amidst widespread anger at the decision to cut subsidies, Dbeibah repeated his intention to ensure subsidies benefit citizens, instead of smuggling networks.
The PM ensured that the decision would only be enforced once accepted by the Libyan people and the ideal formula for implementing the policies was reached.
THE NATIONAL
