Oil legal expert Othman Al-Hdhiri wrote an article questioning: Why does the Libyan citizen continue to suffer despite the abundance of crude oil production?
Brega Petroleum Marketing Company is considered the Libyan state’s main arm in managing and distributing fuel and petroleum products. It is responsible for securing the local market’s needs for gasoline, diesel, and cooking gas through storage depots, stations, and transportation networks.
Despite this, Libyan citizens continue to face recurring crises manifested in long fuel queues, sudden shortages, and the return of the black market, raising serious questions about the company’s commitment to its legal and regulatory responsibilities and the real reasons behind the continued distribution bottlenecks in one of Africa’s major oil-producing countries.
First: Brega Company’s Legal Responsibilities
Brega Petroleum Marketing Company was established under Law No. 74 of 1971 to handle fuel marketing and distribution inside Libya. Its main responsibilities include:
- Receiving petroleum products from refineries or imports.
- Storing fuel in depots and tanks.
- Transporting fuel to cities and stations.
- Ensuring regular supplies across all regions.
- Managing distribution operations according to local market needs.
In theory, the company possesses an extensive operational infrastructure capable of covering all Libyan cities. However, actual performance reveals chronic problems in distribution and oversight systems.
Second: Main Failures and Challenges
Weak Oversight and Fuel Smuggling
Fuel smuggling remains one of the most dangerous challenges facing Libya’s distribution sector. Large quantities of subsidized fuel leak into the black market or are smuggled abroad through organized networks, resulting in local shortages despite available quantities on paper.
Unequal Distribution of Allocations
Several Libyan regions complain of irregular fuel supplies compared to others, reflecting major disparities in distribution quotas between cities and stations, alongside repeated accusations of manipulation and weak monitoring.
Aging Infrastructure
The distribution system suffers from outdated storage facilities, tanks, and transport equipment, in addition to weak monitoring and measurement systems, leading to delays, operational losses, and technical breakdowns.
Lack of Modern Digital Management
Large parts of Libya’s fuel system still rely on traditional paper-based procedures, while lacking an integrated electronic system capable of tracking shipments, monitoring consumption, and linking stations to centralized control rooms.
Political and Security Divisions
Fuel distribution operations are directly affected by Libya’s political and security divisions, as instability, road closures, and port disruptions impact the regularity of supplies and market stability.
Third: Why Does the Crisis Persist Despite High Oil Production?
Observers and experts believe the crisis is not caused by fuel scarcity but rather by weak governance and management. Libya possesses massive oil resources, but weak oversight, open-ended subsidies, corruption, and smuggling have deprived the state of full control over the distribution system.
The substantial government fuel subsidies have also created a huge price gap between Libya and neighboring countries, making smuggling an extremely profitable activity that is difficult to contain without deep reforms.
Fourth: Proposed Solutions to Overcome the Crisis
Digitalizing the Fuel System
This includes implementing advanced electronic systems such as:
- Smart fuel cards.
- GPS tracking for fuel trucks.
- Real-time monitoring of stock and consumption.
- Linking stations to a unified central platform.
Restructuring Subsidies
Economic experts stress that maintaining unrestricted fuel subsidies encourages smuggling and waste, making it necessary to gradually shift toward direct cash support for citizens instead of subsidizing fuel itself, while considering the economic and social impact on remote areas, especially southern Libya.
Strengthening Oversight and Accountability
By activating security and regulatory bodies and imposing stricter penalties on violating stations, smuggling networks, and quota manipulators.
Upgrading Infrastructure
This includes modernizing depots and storage tanks, expanding transport and storage capacities, and improving oil port readiness.
Al-Hdhiri also called for establishing a specialized central committee to assess current storage facilities and create new modern depots, alongside an independent tender committee directly linked to the National Oil Corporation rather than Brega Company.
He pointed to the successful experience of Libya’s gas projects as an example of how independent strategic projects can succeed despite sanctions and challenges.
Transparency and Public Data Disclosure
By publishing periodic data on distributed quantities, station names, and available stock levels to enhance public oversight and reduce corruption.
What Should the National Oil Corporation Do Urgently?
Al-Hdhiri stressed the urgent need for the National Oil Corporation, as the supervisory body over Brega Company, to take decisive action by forming an independent technical and oversight committee to evaluate the company’s performance and identify failures in distribution, transport, and monitoring systems.
He also called for reviewing executive management performance, holding negligent officials accountable, imposing electronic fuel-tracking systems from depots to stations, and ensuring fair fuel allocation across cities and stations.
He further stressed the importance of publishing distribution and stock data transparently, reviewing contracts with transport companies and stations involved in bottlenecks or black-market activities, and coordinating broad security efforts to combat fuel smuggling.
Long-Term Structural Solutions
Al-Hdhiri proposed several major reforms, including:
- Accelerating the implementation of the long-delayed South Refinery project, potentially through private investment partnerships.
- Building small refineries near major oil fields to reduce reliance on road transportation.
- Expanding storage capacity through new modern depots financed by national investors and leased to Brega Company.
- Urgently upgrading Zawiya Refinery and restarting and restructuring Ras Lanuf Refinery with qualified leadership and modern operational systems.
- Expanding the use of LPG and natural gas as vehicle fuel instead of gasoline, similar to neighboring countries such as Egypt, Tunisia, Algeria, and Morocco.
Conclusion
Al-Hdhiri concluded that Libya’s fuel crisis is fundamentally a management crisis rather than a resource shortage. Despite the country’s enormous oil wealth, the fuel distribution system continues to suffer from overlapping administrative, security, and economic challenges.
While Brega Company continues to perform part of its operational role, permanently resolving the crisis requires comprehensive reform of management, distribution, and oversight systems based on transparency, modern technology, and sound governance to ensure fair and stable fuel access for all citizens.
