Al-Shalwi: Between Transparency of Figures and the Pressure of Commitments… Is Libya’s Oil Sector Approaching a Major Turning Point?

Oil and economic expert Abdulmonsef Al-Shalwi wrote an article:

In countries where resources are managed efficiently, figures are not viewed as rigid data, but rather as sovereign indicators that reveal the direction of the economy, the condition of the state, and its ability to plan and sustain itself. From this perspective, the National Oil Corporation continues to reinforce an approach that deserves national and institutional recognition: the regular and transparent disclosure of the movement of petroleum product supplies and distribution. This step enhances public trust and presents the facts to the public as they truly are, far from ambiguity or inaccurate estimates.

The data for April 2026 came at a particularly important moment, not only because it details the quantities received and distributed of gasoline, diesel, liquefied gas, kerosene, and heavy fuel oil, but also because it coincides with a pivotal phase in Libya’s oil sector — one defined by the difficult balance between maintaining operations and rising financial obligations.

During April alone, the total distribution of petroleum products in the local market exceeded 1.18 million metric tons, including more than 537,000 tons of diesel fuel and nearly half a million tons of gasoline. These figures reflect the growing local demand, especially given the near-total dependence of the electricity, transportation, and industrial sectors on conventional fuels.

However, a deeper economic reading of these figures reveals a more complex reality:

Every ton distributed locally represents not only a service to the market, but also a huge financial burden and a long chain of operational and contractual obligations that require continuous and stable funding.

Transparency Reveals Reality — It Does Not Beautify It

Notably, the National Oil Corporation did not merely present the supplied quantities, but also clarified details of scheduled shipments, remaining reserves, and the beneficiaries of the fuel, whether distribution companies, power plants, or industrial sectors.

This level of disclosure should not be underestimated, as it shifts public debate from impressions to facts and figures.

When we see that power plants alone consumed more than 314,000 tons of diesel in a single month, we immediately understand the pressure on the supply system and why subsidy costs and operational spending continue to rise.

The “Budget and Commitments” Meeting…

The Most Important Message Behind the Scenes

In this context, the recent meeting between the President of the Audit Bureau and the Chairman of the National Oil Corporation gains exceptional significance, because for the first time such clear discussion emerged regarding the oil sector’s budget crisis and the impact of delayed financial allocations on the stability of production and operations.

The most important message from this meeting is not merely administrative, but also economic and sovereign:

It is impossible to demand increased production, stable supplies, and the continuation of strategic projects while the sector suffers from accumulating obligations and delayed financing.

Oil is not a sector that operates through reactions or temporary solutions; rather, it is a complex system that requires:

A/ Stable financial flows
B/ Clear spending plans
C/ The ability to honor contracts
D/ Continuous infrastructure maintenance

From this perspective, one can understand the direct link made during the meeting between releasing budgets and maintaining production rates and future expansion plans.

The most positive aspect is that the meeting went beyond diagnosing the problem and discussed mechanisms for settling accumulated financial obligations — a necessary step toward restoring financial discipline and improving spending efficiency within the sector.

Revenues Are Rising…

But the Challenges Are Greater

Although initial indicators show growth in oil revenues during April and May, this improvement alone is not enough to judge the sector’s economic health.

Libya’s oil sector faces not only a revenue challenge, but also:

A/ Rising import costs
B/ Expanding subsidy bills
C/ Deteriorating infrastructure
D/ The need to modernize refineries
E/ Increasing local demand pressures

Therefore, any increase in revenues must be invested wisely rather than becoming merely a temporary solution to short-term deficits.

Ras Lanuf…

The Return of the Refinery That Could Change the Equation

Among the most important files that could create real transformation in the coming years is the refinery sector, particularly the Ras Lanuf refinery, over which Libya regained full control after successfully completing the exit process with the foreign partner following nearly 13 years of shutdown.

This return is not merely the recovery of an industrial asset, but the recovery of an important part of economic sovereignty.

If the state succeeds in rehabilitating and efficiently operating Ras Lanuf, this could open the door to:

A/ Reducing dependence on fuel imports
B/ Lowering pressure on foreign currency reserves
C/ Increasing the added value of crude oil
D/ Strengthening national energy security

However, the real challenge lies not only in restarting operations, but in adopting a new vision for the refining sector as a whole — one based on modernization, expansion, and linking refineries to petrochemical industries.

Has the Time Come to Reconsider the Subsidy Philosophy?

The published data raises an extremely sensitive question that can no longer be postponed:

How long can the current subsidy model continue?

When such massive quantities are consumed monthly at subsidized prices, amid smuggling, waste, and irrational consumption, a large portion of the subsidy effectively becomes an economic burden draining the state instead of achieving social justice.

The solution does not lie in abruptly lifting subsidies, but rather in gradually restructuring them through:

A/ Supporting citizens instead of commodities
B/ Building digital distribution systems
C/ Combating smuggling
D/ Improving consumption efficiency

These reforms will not be politically or socially easy, but they have become an economic necessity that cannot be ignored.

What Can We Expect Until the End of 2026?

If current conditions continue without structural reforms, Libya will likely remain heavily dependent on gasoline and diesel imports until the end of this year, while pressures on the electricity grid and service sectors persist.

The more optimistic scenario depends on several factors:

1/ Accelerating funding for the sector’s budget
2/ Launching new strategic projects
3/ Improving refinery performance
4/ Controlling smuggling
5/ Developing the distribution system

If these factors materialize, 2027 may witness the beginning of a gradual transition toward a more stable sector capable of covering a larger share of domestic demand locally.

Conclusion

What is happening today within Libya’s oil sector goes beyond an operational issue or production and consumption figures; it is a real test of the state’s ability to manage its most important sovereign resource with a modern and transparent mindset.

If the April 2026 data revealed the scale of consumption and challenges, the recent meeting regarding the sector’s budget revealed an even more important reality:

The continued operational success of the sector depends on the existence of genuine will for financial, administrative, and investment reform.

Libya possesses oil, strategic location, infrastructure capable of development, and accumulated national expertise.

But today, more than ever, it needs courageous economic management that believes energy security is achieved not only through increasing production, but by building a sustainable system capable of protecting wealth and transforming it into real development for future generations.