Libya’s eastern-based government, led by Prime Minister Osama Hamad, announced on Wednesday its approval of a proposal to end fuel subsidies and the initiation of a mechanism for its implementation. However, the administration provided no further details about the plan.
The proposal comes as Libya remains deeply divided between rival governments—the eastern administration in Benghazi and the internationally recognized government in Tripoli, led by Abdulhamid Dbeibah. The feasibility of implementing such a policy across the fractured nation remains uncertain.
Libya, an OPEC member, currently offers one of the world’s cheapest gasoline prices at just 0.150 Libyan dinars ($0.03) per litre, according to Global Petrol Prices. This heavily subsidized fuel market has fueled a lucrative smuggling industry, estimated by the World Bank to be worth at least $5 billion annually.
The subsidy reform plan 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 CBL board members.
Fuel subsidies have been a significant financial burden, costing Libya 12.8 billion Libyan dinars from January to November this year, according to CBL data.
In January, Tripoli-based Prime Minister Dbeibah proposed putting the issue of fuel subsidies to a public survey but has since taken no further steps toward implementation.
As both administrations continue to navigate Libya’s political and economic crisis, the fate of the subsidy reform remains uncertain, with significant challenges ahead in bridging the nation’s deep divides.
