Libya’s Eastern-based Administration announced it had approved a proposal to abolish fuel subsidies and would begin developing a framework to implement the decision.
The government, led by Osama Hamad, a rival to the internationally recognised administration in Tripoli, provided no additional details about the plan.
It remains uncertain whether Hamad’s administration will be able to execute the proposal in the politically fragmented nation.
In Libya, a member of OPEC, gasoline is heavily subsidised, costing just 0.150 Libyan dinars ($0.03) per litre making it the second cheapest globally, according to data from Global Petrol Prices.
Fuel smuggling has become a lucrative enterprise, thriving amid the chaos of political instability and armed conflicts that have plagued the country since the 2011 uprising that ousted former dictator Muammar Gaddafi.
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The nation has been divided since 2014 into warring eastern and western factions. A World Bank report estimates that fuel smuggling from Libya generates at least $5 billion annually.
The decision to move forward with the subsidy removal was approved during a meeting in Benghazi, attended by Hamad, Deputy Governor of the Tripoli-based Central Bank of Libya (CBL), Mari Barrasi, and four members of the bank’s board of directors. The meeting took place at the Benghazi branch of the CBL.
Hamad was appointed as prime minister in 2023 by the eastern parliament, replacing Abdulhamid Dbeibah. Dbeibah, who was installed through a United Nations-backed process in 2021, had been declared illegitimate by the eastern parliament.
In January, Dbeibah stated that he would seek public input on the removal of fuel subsidies through a survey, but no further steps have been taken on the matter since.
The cost of Libya’s fuel subsidies, a significant burden on the state’s finances, remains a contentious issue in the country’s ongoing political and economic challenges.anuary to November of this year totalled 12.8 billion Libyan dinars, CBL data shows. The official exchange rate is 4.8 Libyan dinars to $1.
