Libyan oil exports are falling dramatically with the country bracing itself for a sixth consecutive month of strikes at its oil ports. Exports of Libyan oil have fallen from 1 million barrels per day in July 2013 to just 110,000 barrels per day, according to Reuters.
Oil exports account for almost all of the Libyan government?s $50 billion annual revenue. The government estimate that it has lost more than $10 billion in oil revenue since the strikes began.
The Libyan government has warned that it might be unable to pay wages, while power cuts across the country are commonplace.
There is little room to trim expenditure, however, with more than half the annual budget earmarked for public salaries and politically sensitive subsidies for a range of products including bread, fuel and services such as hospital treatment.
“I don’t think they will cut salaries or subsidies because I think that’s extremely dangerous,” Alex Warren of advisory group Frontier, told Reuters.
The problem could be compounded by an imminent pay rise for workers in the oil sector, which comes into force in January 2014. Workers in the oil sector, who account for about 80% of GDP, are entitled to a 67 percent salary increase, a government measure intended to ease dissent.
There is, however, a glimmer of light at the end of the tunnel for Libya?s besieged government. Oil output is expected to rise by 300,000 bpd in the coming days after the government declared the end of a protest at the large El Sharara field.
Even so, Labour Minister Mohamed Swalim took to the airwaves for an hour-long television broadcast this week to hammer home the urgency of ending the blockades.
“If the situation continues this will lead to collapse, to a dark tunnel leading into the unknown,” he said.
