Al-Hdhiri: Electricity Is Not a Victim of a Decision, but of Years of Mismanagement

Written by: Oil law expert Othman Al-Hdhiri

Every time the electricity crisis worsens, people look for a direct cause to explain what is happening. Recently, blame has been directed at the decision of the Attorney General to suspend the swap (barter) system, to the point that, in the view of some, this decision has become the primary cause of fuel shortages and power outages.

However, reducing a crisis of this magnitude to a single decision does not reflect the reality of what happened, nor does it help in understanding the roots of the problem.

The truth that many overlook is that the swap system was not an invention introduced after 2011. Rather, it was one of the tools the state relied on for years to meet the market’s needs for petroleum products. However, it was not an open system without controls. It was governed by precise technical and financial procedures that determined quantities, the number of shipments, the refineries involved, pricing mechanisms, and the settlement of differences.

The swaps were carried out with traditional partners who owned well-known oil refineries, within a framework of oversight and governance. That is why the system was successful.

What happened later, however, was not an improvement of the system, but rather the stripping away of its substance. Controls were neglected, room for discretionary practices expanded, and intermediaries and brokers entered a file that was supposed to remain governed by technical and economic standards. Dealings began to take place with entities that did not own oil refineries, at prices exceeding prevailing market prices, and in quantities that surpassed market needs. As a result, the import bill soared into the billions, raising legitimate questions about the efficiency of management and the integrity of the procedures.

In light of these circumstances, the intervention of the Attorney General himself was a swift response to what the law requires in terms of protecting public funds and national wealth. It is natural for him to intervene when there are suspicions of violations or irregularities that require investigation and corrective action.

As for holding this intervention solely responsible for the electricity crisis, that amounts to ignoring a long series of structural problems that had existed for years before the decision.

The real crisis is not the existence or absence of the swap system, but rather the absence of sound management. A system that succeeded in the past will not succeed today if the same environment remains—an environment that allowed corruption to run rampant, oversight to weaken, and accountability to disappear.

It is unfortunate that the public debate has turned into calls for the return of the swap system, as though it were a magic solution to the crisis, while the same system continues to face the very challenges that caused it to deviate from its original objectives.

Restoring the mechanism without reforming the system that manages it would mean reproducing the same causes that brought us to the current situation.

The oil sector has suffered significant losses as the role of traditional partners—who represented an important element in the stability of refining and supply operations—declined. They were replaced by arrangements that, in many cases, lack the standards necessary to ensure efficiency and transparency.

This is not merely a technical issue; it is an issue that affects the country’s economic security and the sound management of its most important resources.

The citizen does not care about the name of the mechanism being used or the form of the contracts concluded as much as they care about having a reliable electricity supply and seeing their national wealth managed efficiently and with integrity. This objective can only be achieved by rebuilding the oil marketing system on the foundations of transparency, oversight, and efficiency, while keeping narrow interests away from strategic decisions.

Protecting public funds does not conflict with meeting citizens’ needs. On the contrary, the two complement each other. Portraying the situation as though the country must choose between providing electricity and protecting its oil wealth is misleading, because sound management alone can achieve both objectives simultaneously.

Ultimately, it must be clear that the problem is not the “swap” mechanism itself, but rather how it is managed, who manages it, and under what controls it is implemented. If the system is reformed, any mechanism can succeed. If corruption remains, any mechanism will become another avenue for draining public funds.

Therefore, what is required today is not a return to the past, but a restoration of its principles: discipline, oversight, efficiency, and placing the national interest above all other considerations. These are the true guarantees of energy security, the protection of national wealth, and the restoration of citizens’ trust in their state institutions.