Reserves crisis jeopardizes Libya's future - Al-Monitor: the Pulse of the Middle East

Reserves crisis jeopardizes Libya's future - Al-Monitor: the Pulse of the Middle East:



"Libya is a rich, large country. It is among the few countries in the Arab region and the world which are not indebted to international or regional financial funds. The most important is that its population, as compared with other oil producing and exporting countries, is considered small, not exceeding 6 million. Before the political change, Libya’s reserve amounted to $165 billion, and its annual oil returns were $60 billion.



These reserves, however, are being gradually eaten away, while the gold reserve volume was never announced. The reason behind this is the decline that revenues witnessed as production decreased from 1.6 million barrels per day in mid-2012 to less than 300,000 barrels per day due to unrest and protests that took place in the main oil facilities, leading to the shutdown of prominent oil ports despite signs of a solution looming on the horizon. Also, refinery stations were rendered dysfunctional, which led Libya to import fuel. This comes in addition to the oil smuggling operations that have been going on for three years.



Recently, the Libyan government encouraged the central bank to use money from a special reserve fund that comprises billions of dollars accumulated through previous oil sales. The aim was to help compensate for the large loss of oil revenue due to the decrease of production and subsequently exports. This has almost paralyzed the general finance of the country."



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