Libyan Minister of Oil and Gas, Dr. Abdulbari Alarusi [Al Arusi] (pictured), has said that Libya plans to do away with all fuel subsidies within three years:
“The authorities intend to remove subsidies on all fuel, including both gasoline and diesel .. We expect the implementation of this process to take place within the next three years and there will be awareness campaigns for citizens in order to prepare them.”
According to the report from the Daily Star in Lebanon, the subsidization rate is 75 percent, meaning the state covers three-quarters of the cost of fuel.
Data from the International Energy Agency (IEA) shows that Fuel subsidies in Libya cost around 8.5 percent of GDP in 2011 – averaging out to about $487 a head or roughly $3 billion.
Meanwhile the International Monetary Fund (IMF) estimates over 14 percent of Libya’s budget, or about $7 billion will this year, be swallowed up by subsidies for food and fuel.
The government says the subsidieas are ineffective because they encourage smuggling and fail to target those most in need of state help.
(Source: Daily Star)