Asharq Al-awsat English Middle-east and International News and Opinion from Asharq Al-awsat Newspaper

Exclusive - Closure of Libya Oil Ports Revives Demands for Equal Division of Revenues

Exclusive - Closure of Libya Oil Ports Revives Demands for Equal Division of Revenues

Wednesday, 22 January, 2020 - 07:45
Pipelines are seen at the oil port of Brega, Libya, in January 2017. (Reuters)
Cairo – Jamal Jawhar

Libya’s oil wealth has often fallen victim to bickering between rival parties and exposed the country to foreign meddling. Observers believe that Libya’s real crisis revolves around its significant oil wealth whereby local parties and foreign forces alike are competing to lay claim to it in one way or another.

MP Ibrahim Abou Bakr called for holding an emergency meeting to address United Nations Secretary-General Antonio Guterres and concerned countries to emphasize to them the need to equally distribute the wealth among “all Libyans.”

A fuel crisis recently emerged in the country in wake of the closure of oil fields and ports in eastern and southern Libya, revealed Mohammed Sando, a member of the Tabou tribe council of elders, to Asharq Al-Awsat.

The National Oil Corporation that is affiliated to the Tripoli-based Government of National Accord (GNA) accused Libyan National Army (LNA) loyalists of being behind the move. It warned that Libya’s output as a result could drop from 1.2 billion barrels per day to 72,000.

Sabha native, lawyer Ali Emlaimedi warned that his region will soon suffer from a fuel crisis, revealing that the price of a cooking gas canister on the black market has jumped to 80 dinars, with the dollar equal to 4.25 dinars. The official price of a canister does not exceed two dinars.

Meanwhile, locals informed Asharq Al-Awsat that they have started to witness power cuts.

A resident of Ghat city said: “Our area has started to suffer from a fuel shortage, but the closure of the oil ports started to affect us three days ago.” He cited the “astronomical” rise in gas canister prices and noted that private gas stations were manipulating prices.

Abou Bakr had declared on his Facebook page that he opposes the “GNA and its loyalist militias controlling the sources of our income.” He accused them of abusing oil revenues to finance their efforts to “kill our children and destroy our cities. We therefore call for sharing the revenues equally among all Libyans.”

His remarks underscore the frequent crises that have plagued Libya over the years where residents of the South have often complained that their rights are being denied and overlooked by successive governments. Among these problems is the shortage in fuel.

In wake of these tensions, Sando underlined the need to unite the NOCs in the east and west under one institution, demanding that it fairly distribute revenues.

He suggested to Asharq Al-Awsat that this may be possible by adopting modern mechanisms with the support of the United Nations or Libyan experts.

The country’s oil revenues are deposited in the central bank in Tripoli where they are distributed according to the state budget.

The tribes accuse the NOC of unevenly distributing revenues, which prompted them to shut down oil fields and ports last week, Sando went on to say. “The South has not reaped a single benefit from oil production. Oil derivatives are sold to us at ten times the price compared to other regions.”

He said that a liter of gasoline in the North costs 15 cents, while in the South it reaches as much as two dinars and could be sold at triple the price even. “It is as if we are living in another country.”

He acknowledged that the South has also been deeply impacted by the closure of the oil fields and ports. “The residents of the South are the first victims,” he charged.

Dr. Mohammed Abou Sanina, economic adviser at the central bank, countered Sando’s argument, saying the “greatest danger facing Libya is the demand to divide its wealth.”

This wealth includes oil and as reserves, iron ores, copper, gold and uranium.

“Capital generates income. Such wealth cannot be divided between individuals or regions. The best way to benefit from it lies by the masses profiting from the revenues,” he explained.

Editor Picks