A sophisticated, state-sanctioned operation to smuggle subsidized fuel out of Libya has cost the country an estimated $20 billion in lost revenue over a three-year period, according to a new investigation. The findings point to a systematic plundering of the nation’s primary income source, orchestrated by political and security figures who have allegedly transformed smuggling into a pillar of the economy.
The report details how, starting in 2021, authorities effectively institutionalized the illegal export of fuel. The scheme exploited a system where abundant Libyan crude oil was traded for refined fuel imports. Instead of being sold domestically at subsidized rates, vast quantities of this imported fuel were diverted and sold abroad at immense profit by criminal networks, often with the complicity of officials.
The scale of the operation became particularly pronounced after a leadership change at the National Oil Corporation (NOC). Data shows fuel imports surged dramatically, peaking at over 41 million liters per day by late 2024—a volume far exceeding any plausible domestic need. Investigators estimate that in 2024 alone, more than $6.7 billion worth of fuel was illicitly exported, an amount that could have more than tripled combined national spending on healthcare and education.
The smuggled fuel has been trafficked to numerous destinations, including Sudan, where it is reported to have helped prolong the ongoing civil conflict, as well as to neighboring countries and across the Mediterranean.
This systematic diversion has had a crippling dual effect: it has stripped the state treasury of vital foreign currency earnings while creating artificial shortages at home. Libyan citizens, particularly in remote areas, are often forced to buy fuel on the black market at significantly higher prices.
The report calls for an internationally backed probe into officials at the heart of the smuggling enterprise and for sanctions against those responsible. It argues that the operation’s massive scale indicates it is not a mere symptom of poor governance, but a deliberate strategy by ruling elites to extract wealth.
While the NOC has stated it discontinued the oil-for-fuel swap system in early 2025 and notes a recent decline in import quality, energy analysts contend that the country continues to import far more refined fuel than its domestic consumption can justify, suggesting underlying issues persist.