Libyan businessman Husni Bey said that his call for the complete cash replacement of fuel and energy subsidies—whose annual cost he estimates at more than 100 billion Libyan dinars—is driven not only by economic considerations but also by social and humanitarian objectives.
According to Bey, the primary goal of the proposal is to lift at least one-third of Libya’s population out of poverty.
He argued that the more than 100 billion dinars currently spent on subsidizing fuel and energy do not effectively reach low-income citizens. Instead, he claims a significant portion is lost to fuel smuggling, the parallel economy, and excessive consumption. Direct cash transfers to citizens, he says, would achieve multiple objectives simultaneously.
Bey added that citizens are better positioned than governments or officials to determine their families’ spending priorities. Under a cash-transfer system, households would become more conscious of fuel and energy consumption, leading to greater efficiency and reduced waste.
He estimated that improved consumption behavior could reduce fuel imports and domestic fuel consumption by at least 40%, generating annual savings of more than $6 billion.
According to Bey, saving $6 billion per year would improve Libya’s balance of payments, reduce pressure on foreign exchange reserves, strengthen the Libyan dinar, and enhance the government’s ability to finance development projects, infrastructure, and investment programs.
Economic Benefits for Businesses
Bey also acknowledged that the reform could benefit the private sector, including business owners like himself.
He argued that when millions of Libyans have higher disposable incomes and stronger purchasing power, they buy more goods and services, creating growth opportunities for:
- Trade.
- Manufacturing.
- Investment.
- Service industries.
In his view, this would create a positive economic cycle that benefits both citizens and businesses.
Social Impact
The businessman further argued that reducing poverty would decrease citizens’ dependence on charitable assistance and informal support networks for essential needs such as:
- Healthcare expenses.
- School-related costs.
- Religious and holiday expenditures, including Eid sacrifices.
He also suggested that allowing citizens to receive a direct share of national wealth could help reduce social tensions, resentment, and accusations that wealthy individuals or traders disproportionately benefit from the country’s resources.
Inflation Concerns
Addressing concerns about inflation, Bey stated that higher fuel prices would likely increase transportation costs by approximately 20%.
However, he argued that the broader impact on overall consumer prices would remain limited, estimating additional inflation at around 1.8%. In his view, this increase would be relatively small compared with the potential economic and social benefits of the reform.
Conclusion
Bey concluded that the time has come to phase out commodity-based fuel and energy subsidies and replace them with direct cash support to citizens.
Summarizing his position, he argued that national wealth should reach citizens directly rather than being transferred indirectly through subsidized prices that, in his view, often benefit smugglers and distort the economy.
