The “fuel referendum” will save the Libyan economy or will it save the Libyan economy?

The Libyans are waiting for the unity government in Tripoli, headed by Abdul Hamid Dabaiba, to give its final word regarding holding a popular referendum on a decision to lift fuel subsidies, which has previously been met with great opposition since its introduction, especially in the east of the country.

Most observers of Libyan political affairs expected that citizens would vote against the decision if the referendum was actually held, given the popular reaction to it in recent weeks, which rejected it in form and content due to the economic burdens it would cause to the poor and middle classes, which constitute the highest percentage of the population in the country. Last few years.

The head of the Libyan unity government, Abdul Hamid Al-Dabaiba, said that “his government will raise the issue of lifting fuel subsidies in a general referendum, to poll the opinion of the Libyans regarding this file.”

Al-Dabaiba added in his speech during his participation in the activities of a Libyan-wide social forum in Tripoli last weekend that “the door to discussion is open regarding the way in which it is possible to prevent the waste of resources and cut off fuel smugglers.”

At that time, he also pointed out that “the problem of subsidies had accumulated over 50 years until it became severe and needed a radical solution,” pointing out that “it is inconceivable that 60 billion dinars ($12.5 billion) would be spent on fuel subsidies and go outside the borders and beyond the seas through “Smuggling.”

In his speech, the Prime Minister of the Unity Government focused on convincing the Libyan street that his government’s project aims to prevent smugglers from exploiting wealth and resources and delivering fuel to citizens only, whether for a sum of money or a coupon, stressing that “he will not make a final decision to lift fuel subsidies until after reviewing them.” According to the opinion of the Libyans.”

A settled result

Most of the reactions and comments from analysts, activists, and even some Libyan official figures believed that Dabaiba’s maneuver of resorting to a referendum on the decision to lift fuel subsidies will lead to nothing, and will not succeed in convincing the street of the project, even if the vote is held, the result will be the rejection of the decision.

In turn, State Council member Saad bin Sharada said, “The result of any real referendum regarding removing fuel subsidies will be rejection,” considering that “this step is a government attempt to circumvent the categorical rejection.”

Bin Sharada saw that “the Dabaiba government seeks to organize the referendum with the aim of convincing the government of Osama Hammad, affiliated with the parliament in Benghazi, of the decision, which it has rejected so far, as it is trying to justify the decision and link it to the economic deterioration and the current division in the country.” He warned that “if a real referendum were held, the result would be rejection, even though the government usually runs formal referendums that give results indicating high percentage of support.”

Big consequences

State Council member Saad bin Sharada described Al-Dabaiba’s move as a “dangerous decision” that has many negative economic consequences, saying that “raising fuel prices will lead to an increase in the prices of all other commodities because transportation will rise directly.”

He warned that “there are no parties representing a neutral third party and observer in these referendums, which reduces their credibility in the eyes of the people.”

As for his response to the government’s argument for implementing the decision, which focuses on combating fuel smuggling, Ben Charada pointed out that “it is not the citizen who smuggles fuel, but rather people in the higher authorities who possess weapons who practice systematic smuggling.”

He concluded that “any economic reform must be followed by an integrated package of economic reforms, and that until this moment there is no real state in Libya, nor effective institutions capable of implementing everything issued by the authorities, whether legislative or executive.”

bad idea

For his part, economic analyst Mukhtar Al-Jadid described the Dabaiba government’s intention to hold a referendum on lifting fuel subsidies as a “bad idea.”

Al-Jadeed said, “The government’s idea of ​​holding a referendum or opinion poll on the issue of support is a bad idea if this poll depends on answering with the word yes or no, because the answers are known in advance, and most of them will be with the word no.”

He agreed with the proposal circulated by many analysts, which warns that rising fuel prices will lead to raising the prices of all other commodities, adding that “this decision cannot be implemented effectively in all regions, given the rejection of the decision by the government of Osama Hammad in the east, which is affiliated with parliament.” .

Alternative financing sources

Many other viewpoints and analyzes were concerned with explaining the insistence of the Prime Minister in Tripoli, Abdul Hamid Al-Dabaiba, on implementing the decision to cancel fuel subsidies, despite popular and official opposition to it, and most of them focused on linking the project to the government’s search for new funding after Parliament tightened the financial stranglehold on it, and it received a major blow from the government. Central Bank Governor Al-Siddiq Al-Kabir, who officially announced the refusal to disburse any budget for this year except to a unified government agreed upon by all political parties in the country.

The political advisor to the Speaker of the House of Representatives, Faisal Bouraika, considered the threat of the Prime Minister of the Interim Unity Government, Abdul Hamid Dabaiba, to hold a referendum on the issue of fuel subsidies as “unrealistic.”

Bouraika said, “Al-Dabaiba is maneuvering to find sources to finance his government, after the Central Bank of Libya refused to grant him a government budget outside the legitimacy of the House of Representatives. Then he wants to search for other sources to finance his government from outside the budget, through what is known as the fuel clause.” He continued, “The real problem in Libya is the government division and the absence of strong security systems that meet the need of the National Oil Corporation to monitor gas stations through a clear system, to prevent the leakage of diesel and gasoline into the hands of smugglers.”

Sufficient time to study

There remains another point of view for some Libyan figures, especially those from the economic field, who believe that the decision to adjust fuel prices or lift subsidies on them is a necessary decision, but after conducting sufficient studies that cover the entire project, include its economic effects, and determine the appropriate time for its implementation, because it cannot last. This government support for fuel has been in effect for a long time, due to its high cost to the state.

Those who hold this opinion say that the very low value of Libyan fuel, which makes it the cheapest in the world, is “unreasonable” and that it is unnatural for the price of a liter of gasoline to be less than the price of a liter of water in Libya, in the midst of a world hungry for energy and eager for fuel, which will always make the country a hotspot. For smuggling and a destination for smugglers.