The Customs Authority at the Ras Jdair Libyan-Tunisian land border crossing has handed over a total of 22,200 litres of seized fuel intended for smuggling into Tunisia, it reported Wednesday.
The confiscated fuel, contained in multiple plastic jerrycans and empty water containers, was returned to the Brega Marketing Company, the National Oil Corporation subsidiary in charge of fuel distribution in Libya, in two shipments of 6,200 and 16,000 litres.
Huge Libyan fuel subsidies make smuggling profitable
Libyan fuel has been smuggled in huge quantities into Tunisia for decades due to the enormous subsidy Libyan it enjoys – a legacy from the Qaddafi era.
Governments unable to reform subsidies
However, the political, military, and economic instability in Libya since the 2011 revolution that ended the 42-year-old Qaddafi regime has meant successive governments have been unable to remove the subsidy – at huge cost to the Libyan state which is struggling economically.
Lack of refinery capacity means Libya must import fuel deficit with hard currency
Libya does not have enough domestic refinery capacity and has to import fuel from abroad at international prices using hard currency. Its fuel smuggling problem is, therefore, contributing to the exhaustion of its much-needed and dwindling foreign currency reserves.