During his meeting with the (elected) Local Chiefs of Libya, Tripoli based Libyan Prime Minister, Abd Alhamid Aldabaiba, said Libya loses about LD 60 billion (US$ 12 bn) annually in subsidies.
He said this is equivalent to half the state budget, stressing that this subsidy does not go to the average Libyan citizen, but rather a large percentage of it goes to smugglers.
Aldabaiba has announced that he is reforming the current subsidy system by paying the estimated calculated amount equivalent of fuel by every Libyan directly into their bank accounts.
Several objects have been raised by the general public to this reform, namely that the corrupt ruling elite in Libya would not actually deliver this subsidy payment into people’s accounts.
There is also a fear that the inflationary effect of removing subsidies would negate any payments made by the government.
Aldabaiba said he will consult with the general public through conducting opinion polls and is engaging in an information campaign to sell the idea of subsidy reform.
Weak interim governments lack mandate to force subsidy reforms
It will be recalled that nearly every interim Libyan government since the February 2011 revolution that ended the Qaddafi regime has talked about subsidy reform without taking any action.
The reality is that interim governments are weak and lack the mandate to force through any unpopular reforms. Aldabaiba is too vulnerable to his political opponents, be it Khalifa Hafter or House of Representatives Speaker Ageela Saleh in the east or the various militias and political factions in the west of Libya – to force such an unpopular reform.
Ultimately, only an elected government would have the mandate to implement such a reform.
Decision to remove fuel subsidies has been taken: PM Aldabaiba (libyaherald.com)
Supreme Council for Energy Affairs holds first meeting (libyaherald.com)
Alternatives to fuel subsidies with cash payments delivered to Aldabaiba (libyaherald.com)
Libya’s Economic Reform Salon proposes reforms for the country’s fuel subsidies | (libyaherald.com)
Fuel subsidy reform proposal presented to Serraj government | (libyaherald.com)
Libya reduces subsidies on commercial-use kerosene | (libyaherald.com)
Subsidies are seen as an entitlement by Libyans: GNA Planning Minister | (libyaherald.com)
Government to reduce petrol subsidies | (libyaherald.com)
Cash for goods subsidy reform adopted by Tripoli authorities | (libyaherald.com)
Subsidy reform: petrol prices to be increased by 200% | (libyaherald.com)
2014 Budget commits government to subsidy reform by Jan 2015 | (libyaherald.com)
The 2014 Budget: Subsidies up – despite deficit and oil exporting crises | (libyaherald.com)
2014 budget expected to be LD 68.59bn – salaries and subsidies shoot up | (libyaherald.com)
Subsidy reform: Smugglers are the ones prospering from subsidies – Zeidan | (libyaherald.com)
Cabinet meeting forms committee on subsidies – Zeidan | (libyaherald.com)
Oil minister says fuel subsidies to go by 2016 | (libyaherald.com)
