Libya’s Eastern Government Proposes Plan to End Fuel Subsidies

Libya’s eastern-based government announced that it has approved a proposal to eliminate fuel subsidies and is working on a mechanism for its implementation. The administration, led by Osama Hamad, provided limited details about the plan, leaving questions about its feasibility in the country’s politically fractured state.  

In Libya, an OPEC member, gasoline prices are among the cheapest in the world, with a litre costing just 0.150 Libyan dinars ($0.03), according to Global Petrol Prices. The heavily subsidized fuel has contributed to widespread smuggling, particularly as the nation continues to grapple with instability and conflict stemming from the 2011 overthrow of former leader Muammar Gaddafi.  

The decision to end subsidies was finalized during a meeting in Benghazi. Hamad convened with Mari Barrasi, the deputy governor of the Tripoli-based Central Bank of Libya (CBL), along with four board members at the bank’s Benghazi branch headquarters.  

Osama Hamad, appointed by the eastern parliament in 2023 to replace Abdulhamid Dbeibah, faces significant challenges in implementing the proposal. Dbeibah, who was selected through a U.N.-backed process in 2021, still leads the internationally recognized government based in Tripoli. Libya has been divided between rival administrations in the east and west since 2014, complicating efforts to address economic and political issues.  

Whether Hamad’s government can enforce this decision across the divided nation remains uncertain. However, the move signals a potential shift in Libya’s economic policies amid ongoing turmoil.