The Continuing Crisis of Withholding Libya’s Oil Revenues: The Struggle for Funds
From protests against militias linked to Khalifa Haftar that halted oil production in 2020 (Anatolia)
The Central Bank of Libya confirmed that the “Libyan foreign bank still retains revenues from the sale of oil”, noting in the statement of income and expenditure during the first 11 months of this year that the revenues from the sale of oil during this period amounted to 67 billion dinars, while the revenues of Foreign Exchange which were delivered to her reached 19 billion dollars.
Data from the Central Bank showed that revenues from oil in the period from January 1 to April 30 amounted to 37.4 billion dinars, and from the beginning of the year to the end of May 37.3 billion dinars, and would remain at that level until the end of June ., before rising to 56.1 billion dinars at the end of July, and continuing to grow to 56.9 billion dinars at the end of August, after which it finally reached 67 billion dinars (the dollar is 4.85 dinars). September and remains constant at that number at the end of October, October and November.
Responsible sources in the Central Bank of Libya confirmed to Al-Araby Al-Jadeed that “the oil revenues for the months of September and October have not been transferred from the account of the Libyan Foreign Bank to the account of the Central Bank of Libya, while they should be transferred after 72 hours of receipt.”
Economists said the central bank’s figures showed that much of the oil revenue was held abroad and not delivered to the central bank, in light of the country’s resources being affected by political tensions between the contenders for power, while others saw the withholding of revenue “an appropriate solution to preventing waste of money” in these circumstances.
While the officials of the National Oil Corporation refused to comment on what was stated in the statement of the Central Bank regarding the withholding of income and how long this situation will continue.
The National Oil Corporation in Tripoli has previously on several occasions justified the withholding of oil revenues in its accounts with a Libyan foreign bank pending the achievement of a comprehensive political settlement, stressing that the withholding of funds is “temporary”.
Libyan economist Abdel-Fattah Abu Qassa pointed out that the retention of oil revenues in the Libyan Foreign Bank in the light of political conflicts caused negative effects on the economy, including the rise in the price of foreign currencies, delays in the payment of salaries, and the inability to increase them to meet the increasing living burdens in light of high prices.
Since the 1960s, the oil sector has dominated traditional economic activities in Libya, until it became the country’s main source of national income, as oil exports account for more than 90% of government revenue and more than 95% of export earnings, according to official figures.
Since last March, Libya has witnessed a power struggle between the two governments, as the Dabaib government controls the capital and the state’s sovereign and financial institutions, and refuses to hand over power until elections are held. It is opposed by the government of Libya Fathi Bashagh, supported by the speaker of the parliament, Aguila Saleh, and accepted in the areas of retired Major General Khalifa Haftar, in the east and south of the country, which demands entry into Tripoli, and has tried to do so on three occasions. , while now he takes the city of Sirte as his temporary seat.
In addition to entangling the oil wealth map in the political conflict, the aspirants to power have recently embarked on a race to issue decisions and promises, which analysts have described as “populism”, including wage increases and the distribution of the country’s wealth.
The National Oil Corporation had previously seized oil revenues at the end of 2020 in its Libyan foreign bank accounts. In 2021, the Foundation ended its revenue freeze and released $7.76 billion that had been frozen for four months and 14 days.
Libyan banking expert Moataz Huwaidi said the retention of revenue is necessary, saying in a statement to Al-Araby Al-Jadeed that “this comes to prevent the waste of money that is spent here and there. The government in Tripoli is beyond legitimacy and is an interim government which does not want to hand over power, and spends indiscriminately.” , adding that NOO’s retention of export revenues depends on reaching a political agreement between all parties.
Libya currently produces about 1.260 million barrels per day of crude oil, and hopes to increase production to 1.45 million barrels per day by the end of 2022, reaching 1.6 million barrels per day in 2023, and 2.1 million barrels per day in in the coming years.
Economic analyst Abu Bakr al-Hadi said: “There are fierce battles between the government in Tripoli and the parliament in the east over spending money to win over the popular base.”
The National Oil Corporation has exclusive rights to manage and contract oil activities in Libya, while the Central Bank oversees the management of oil revenue, according to the laws in force in this oil-rich country.
In a recent report, the US Energy Agency increased the volume of Libyan oil reserves from 48 billion barrels to 74 billion, after data showed that Libya has the fifth largest shale oil reserves in the world.
