Higher crude output does not guarantee diesel at the pump; weak state institutions disrupt the fuel chain
Libya – Oil expert Othman Al-Hadiri said higher Libyan crude oil production does not necessarily mean diesel is available at filling stations at the official price, noting that crude is a raw material that must be refined or imported before storage, transport and distribution.
Import dependence above 75%
Al-Hadiri told Sputnik in exclusive remarks that Libya still relies heavily on importing petroleum products to cover domestic market needs, at a rate exceeding 75%.
He said higher crude output can coincide with diesel shortages because of limited local refining capacity and problems in imports, transport and distribution, as well as smuggling.
He added that the issue is not only how much oil is produced, but the market’s diesel demand, the volumes refined and imported, what actually reaches distribution stations, and what leaves the official system.
Parallel market and institutional responsibility
Al-Hadiri stressed that responsibility for fuel reaching the parallel market cannot be pinned on a particular body or individuals without official investigations and evidence, but institutional responsibility covers the distribution system, oversight and anti-smuggling efforts.
He said smuggling, reselling subsidised fuel, manipulating distribution, transport and storage quotas, and exploiting the wide gap between the official price and parallel-market prices are factors that deepen the crisis.
Electricity pressures diesel supplies
On the electricity crisis, Al-Hadiri said there is a direct link between gas and fuel supplies and the capacity of a number of power plants, as a drop in gas supplies may push some plants to use diesel or liquid fuel instead, raising demand and squeezing local supplies.
He stressed that the electricity crisis is not limited to a fuel shortage, as generation, maintenance, transmission and distribution networks and security factors are also involved.
Crude is one thing, diesel another
Al-Hadiri said Libya’s paradox is that the country holds large oil wealth that does not necessarily turn into products available to citizens at the official price, in the right place and at the right time.
He added: “Crude oil is one thing and diesel is another; production is one thing and refining, imports and distribution are another; and having fuel in depots does not necessarily mean it reaches the consumer.”
He concluded that the crisis lies in management at the upper levels of the oil sector, and is worsened by misplaced priorities and smuggling that benefits influential parties, arguing that the main and deepest factor is the weakness of state institutions in managing and protecting the fuel chain.
