Libya’s Bashagha says oil blockade tied to budget release

Reading Time: 3 minutes

Libya’s oil blockade would likely end if the central bank supplies the funds for the budget that parliament approved this week, the parliament-appointed prime minister, Fathi Bashagha, told Reuters.

Bashagha was sworn in by the eastern-based parliament in March but Abdulhamid al-Dbeibah, who was installed as prime minister last year through a U.N.-backed process, has rejected its move leading to a standoff.

Since April, groups in the east have forcibly closed many Libyan oil facilities to demand that Bashagha take power in the capital, blockading much of Libya’s oil output and putting new pressure on world energy prices.

Speaking in the central coastal city of Sirte where he is based while the existing government in Tripoli refuses to cede control, Bashagha also said he did not expect Libya’s political stalemate to trigger a new war.

“As soon as our government receives the budget and it is distributed equitably according to what we mentioned in the budget, then the residents of the fields and the oil crescent will not mind re-exporting the oil,” he said in an interview.

He added that there was a lot of anger at what he called illegal spending by Dbeibah’s government, including corruption and payments to armed groups. Dbeibah has previously denied financial wrongdoing.

“The closure is partial in the oil facilities. It happened as a result of the anger of the residents of the Oil Crescent and the oil fields when they saw the expired government in Tripoli,” Bashagha said.

This week, the parliament approved a 90 billion dinars ($18.6 billion) budget for Bashagha, but the Central Bank of Libya (CBL) has so far worked with the Tripoli government and has made no public sign it will hand over the money.  

Bashagha said he was confident that CBL governor Sadiq al-Kabir would provide the funds.

“Do I think Kabir will prevent or reject a budget that has been classified and has allocated funds through specific budget items and includes all Libyan sectors and affects the lives of all Libyans…? I do not think so,” he said.

Bashagha would not comment on what might happen if Kabir does not finance his government, though analysts have warned of a return to economic division between east and west Libya.

The last major bout of conflict in Libya ended in 2020 and many Libyans fear the current political standoff could trigger a new war.

“There will be no movement of force from east to west or west to east,” Bashagha said.

“In light of the presence of a very large foreign force in the western region of Libya, which was supportive of the defence of the capital, how can there be a war?” he said.

He was alluding to the Turkish forces brought to Libya under the previous internationally backed Tripoli government in which he was interior minister that helped fight off a 14-month assault by eastern forces.

Those forces, under commander Khalifa Haftar, are allied to the parliament which now backs Bashagha as prime minister. Some factions in the west fear a Bashagha government would allow Haftar access to Tripoli.

“This is because of a media confusion,” Bashagha said.

“I was one of the leaders of the defence of Tripoli,” he added.

Reporting by Angus McDowall and Ahmed Elumami; Editing by Toby Chopra

Photo – A file image shows parliament-appointed Libyan prime minister, Fathi Bashagha. EPA-EFE/STRINGER

Once you're here...