Subsidised fuel leaks into the parallel market and neighbouring countries
LIBYA – Two analytical reports published by the Italian news agency Nova highlighted the continued leakage of subsidised fuel in Libya into the parallel market and neighbouring countries.
Seizure of 6,000 litres between Jalu and Awjila
The two reports, summarised by Al-Marsad, said the seizure of 6,000 litres of fuel on the road linking Jalu and Awjila reflected a market fed by a subsidy system that makes petrol and diesel prices in Libya among the lowest in the world.
0.15 dinars a litre and wide profit margins
They added that petrol is officially sold at 0.15 dinars a litre, while the state bears a large part of the actual cost. That price gap, the reports said, creates wide profit margins for smugglers and criminal networks and encourages the smuggling of petroleum products.
Fuel leaks to Tunisia, Niger, Chad and Sudan
The reports noted that part of the fuel is resold on the parallel market inside Libya, while other quantities are moved across the borders to Tunisia, Niger, Chad, Sudan and other countries in the region, where it is sold at higher prices. They said the problem is more evident in the south and in peripheral areas.
Informal networks and armed groups in the south
The reports said shortages of official supplies force residents in some areas to buy petrol and diesel on the black market at high prices, while in the south informal trade networks are intertwined with armed groups and criminal organisations that control roads, depots and border corridors.
Subsidy reform is a political and social challenge
They added that reforming the subsidy system remains a political and social challenge, because any sudden increase in prices will directly affect the purchasing power of the population. The International Monetary Fund, according to the two reports, sees the price gap as feeding private economic interests and generating profits of billions of dollars a year for networks that resell fuel.
Queues of up to five hours in Tripoli
The reports pointed to the paradox of fuel queues returning to Tripoli, with waiting times of up to five hours, despite Libya’s large reserves of sweet, low-sulphur crude suitable for refining.
Reliance on imports and limited local refining
They attributed the repeated supply crises to limited local refining capacity, which requires the import of a large part of the petroleum products needed for local consumption, alongside repeated imbalances in internal distribution.
