A new investigation by the international watchdog “The Sentry” has revealed that fuel smuggling networks in Libya are draining the country of an estimated $6.7 billion every year, making it one of the most persistent and damaging illicit industries in the country. The report accuses powerful networks — involving officials, armed group leaders, tribal elements, and external partners — of exploiting the state’s heavily subsidized fuel system.
Published on The Sentry’s website, the investigation draws on data from the independent analytics firm Kpler, which shows that Libya imported an average of 234,000 barrels of fuel per day in 2024, equivalent to 37.2 million litres, alongside an additional 13.8 million litres refined locally.
According to the report, energy generation — which relies on natural gas and crude oil — consumes around 5.8 million litres per day, while industrial activity and transportation use roughly 2.4 million litres more. This puts total domestic consumption at approximately 23.9 million litres per day, far below the 50.9 million litres available on the market. The discrepancy suggests that around 27 million litres are diverted daily into parallel markets and smuggling networks.
Although the official cost of fuel stands at $0.6 per litre, based on Mediterranean market averages, illegal trafficking significantly increases the real price paid by Libyan consumers and deepens structural economic vulnerabilities.
The report levels accusations at unnamed Libyan actors who allegedly exploit the subsidy system in collaboration with undisclosed foreign partners. It warns that the resulting consequences have harmed Libya and neighbouring regions, creating ripple effects across energy markets and cross-border security.
The Sentry notes that fuel subsidies reduce the amount of crude oil available for export in dollars, depriving the Central Bank of Libya of foreign currency vital for imports of food, medicine, and basic goods. This has contributed to a foreign-currency deficit for two consecutive years, despite stable oil output.
Fuel smuggling has also fueled the depreciation of the Libyan dinar on the black market and increased consumer prices nationwide. Ordinary citizens continue to suffer from chronic fuel shortages, long power outages, and rising costs, as illicit networks siphon off the subsidy programme and intensify economic pressure on households.
The investigation highlights the geopolitical risks associated with the crisis, pointing to the involvement of regional actors including Sudan’s Rapid Support Forces (RSF) and countries such as Russia and the UAE. The issue, it warns, extends far beyond black-market fuel sales, exposing a fractured governance system in which public institutions are controlled by a small group of influential players. Any sudden shift, the report cautions, could trigger broader confrontation.
The Sentry adds that the dismissal of National Oil Corporation chairman Farhat Bengdara in January 2025 and the appointment of Masoud Suleiman may have improved transparency within the sector. However, it warns that reforms are likely to face resistance from groups benefitting from fuel smuggling.
The investigation concludes that armed group leaders and political figures who have amassed significant profits over the years may redirect their wealth into other ventures, meaning the negative economic and political effects of fuel smuggling will persist long into the future.