The debate over lifting fuel subsidies in Libya has escalated, raising concerns among citizens about its impact on their livelihoods, amid differing stances between the Government of National Unity in Tripoli, led by Abdul Hamid Dbeibah, and the Libyan government in Benghazi, headed by Osama Hamad.
In January 2024, Dbeibah announced his intention to proceed with lifting subsidies, which he described as a “drain on public funds,” referring to consultations he held with the Ministers of Finance and Economy. In contrast, Hamad swiftly rejected this approach, considering it “an infringement on the welfare and dignity of citizens.”
However, by the end of the year, specifically in December 2024, Hamad changed his position, announcing his approval to lift subsidies after a meeting with the Board of Directors of the Central Bank of Libya, which sparked widespread public discontent.
Opinions among experts and officials varied regarding this move. Former Oil and Gas Minister Mohamed Aoun believed that lifting subsidies “requires several factors, most importantly providing fair salaries and gradually lifting subsidies with partial support for those with limited income,” criticizing fuel swap operations, which he described as “blatant corruption.”
Economics expert Mohamed Dermish warned that the decision to lift subsidies is “premature and requires the unification of institutions, and the development of a strategic plan for economic reform and improving individual income levels.”
Citizens expressed concern about the repercussions of lifting subsidies. Mohamed Tajouri stated that “the current circumstances do not allow for lifting subsidies, which will exacerbate the suffering of citizens,” while Ahmed Sweii believed that “lifting subsidies will lead to higher prices and increased inflation rates.”
Narmin Al-Sharif, President of the Federation of Libyan Trade Unions, strongly criticized the Hamad government’s approval to lift subsidies, accusing it of “playing with words” and “seeking to appease Dbeibah.” Sharif called for “the termination of all political bodies, including the Presidential Council, the House of Representatives, the State Council, the Government of National Unity, and the Libyan government.”
The Audit Bureau report indicated that “fuel swap operations contribute to low financial collection, as the amount of oil used in these operations reached 8.8 billion dollars, while the National Oil Corporation incurred additional costs of 981.8 million dollars. The total value of supplying the local market with fuel for various purposes in 2023 amounted to 16.6 billion dollars.”
This isn’t the first time the issue of lifting fuel subsidies has been raised in Libya. In March 2009, the Libyan General People’s Congress canceled a decision to raise the price of a liter of gasoline from 180 dirhams to 200 dirhams, before fixing the price per liter at 150 dirhams, in what the authorities described at the time as an attempt to “regulate the fuel market.”
It is worth noting that Libya has 5 refineries, but 60% of them are out of service, which forces it to import huge quantities of fuel annually.
The issue of lifting fuel subsidies remains a sensitive issue in Libya, sparking widespread controversy and concerns in light of the economic and living crisis that the country is suffering from.