The eastern Libyan government said Wednesday it had accepted the request to end subsidy on oil and would develop a process to implement the agreement.
The factional government, led by Osama Hamad, did not provide details about the request.
However, it was unclear whether Hamad’s government could implement the agreement in the divided country.
According to the World Gas Price Online Tracker, a litre of gasoline in OPEC member Libya costs just 0.150 Libyan dinars ($0.03), making it the second-cheapest gasoline in the world.
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The economy has thrived amid political turmoil and unrest caused by the 2011 uprising against former dictator Muammar Gaddafi. In 2014, the country was at war with the eastern and western governments.
According to a World Bank report, the value of oil smuggling in Libya is at least $5 billion a year.
Hamad approved the proposal to withdraw aid in a meeting in Benghazi with Mari Barrasi, the deputy governor of the Tripoli-based Central Bank of Libya (CBL), and four members of the department’s corporate board.
The meeting was held at the CBL Benghazi branch headquarters.
Hamad was elected in 2023 from the eastern region to replace Abdulhamid Dbeibah, who took office in 2021 through a UN-backed process that the government says has lost its legitimacy.
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Tripoli-based Dbeibah said in January it would submit the issue of removing the fuel subsidy to a public inquiry but has since done nothing further.
CBL data shows that the cost of oil subsidies from January to November this year totalled 12.8 billion Libyan dinars. The exchange rate is 4.8 Libyan dinars to $1.
