Libya reportedly lost between $2.4 billion and $4.4 billion through the diversion of imported fuel between January and September 2026. At a Security Council meeting on October 14, Hanna Tetteh, the UN Secretary-General’s Special Representative, estimated that 30% to 50% of volumes imported during that period had been diverted from official channels. These figures are estimates presented to the UN, rather than a final audit of losses attributable to individual smuggling networks.
Over nine months, the country reportedly imported 8.15 million tonnes of petroleum products for $8.9 billion. If a substantial share of cargoes fails to reach the official market, the state bears the purchasing cost without delivering the expected benefits to consumers or economic activity. Smuggling coexists with shortages, highlighting a disconnect between financing imports and effectively distributing products.
A public bill without guaranteed supply
The National Oil Corporation (NOC) imports around 80% of the refined petroleum products consumed in Libya at prices linked to the international market. Import costs, combined with domestic subsidies, weigh on the finances of both the company and the state. Purchases that escape declared distribution reduce the ability to serve households and businesses while feeding parallel channels.
The estimated $2.4 billion to $4.4 billion is a broad range. Its width reflects uncertainty over the share of diverted volumes and their valuation. It should not be interpreted as a sum already identified in a public account or fully recoverable by the state. The amount depends on cargo values, the product concerned, applicable prices and the proportion actually lost.
Shortages remain among the most visible effects. When imported fuel fails to reach filling stations, consumers may face queues, higher informal prices or irregular supply, even though imports represent substantial public expenditure. This weakens confidence in a subsidy system intended to keep products affordable but which can create resale incentives when the gap between administered and external prices is large.
Losses add to oil-sector disruptions
Fuel diversion is taking place while crude oil revenue is itself exposed to interruptions. In September, pipeline blockades in the country’s west and southwest reportedly resulted in the loss of around one million barrels, valued at nearly $100 million. The Hamada–Zawiya line was blocked from September 15 to 20, followed by the Sharara–Zawiya connection from September 21 to 26, amid disputes over regional appointments.
These incidents affect public revenue while imported fuel costs continue to be financed. NOC must simultaneously manage refined product purchases for the domestic market, crude production and exports, and investment needs in undeveloped deposits. In August, its chairman estimated that $30 billion to $40 billion would be required to develop more than 60 oil and gas discoveries not yet in production.
These competing needs highlight an economic trade-off: foreign currency spent on imports and losses from diversion reduce the resources available to modernize the sector and develop national assets. The aim is not to pit supply needs against production investment, but to limit losses so that import expenditure actually benefits the Libyan market.
Fragmentation makes oversight more difficult
According to Hanna Tetteh, political and institutional fragmentation complicates management of national resources and coordination of public expenditure. The supply chain involves multiple actors: authorities, importers, depots, distribution companies, transport operators and retail outlets. Weak controls or poorly defined responsibilities can make diversion difficult to detect, particularly where state authority is limited.
The UN representative warned that attacks on oil infrastructure could warrant Security Council measures against actors undermining the country’s economic situation. Such measures would, however, depend on evidence, investigations and international decisions. Nationally, audits, better volume traceability and effective sanctions will be needed to reduce losses.
Public data on imports, port arrivals, stocks and deliveries to distributors would allow physical flows to be reconciled with expenditure. Regular publication of discrepancies between cargoes received, products distributed and final sales would help identify breaks in the chain and improve planning. Digital tracking systems could strengthen traceability, provided that records are verifiable and controls cover the entire chain.
Reducing diversion without worsening shortages
Dismantling parallel channels cannot rely solely on enforcement. Lasting reform must also improve fuel availability in official networks, clarify subsidy rules, strengthen port and logistics controls and define the responsibilities of public and private companies. If administered prices remain far below import costs, the gap may continue to encourage illegal resale.
Libya must therefore address consumer access, the financial sustainability of imports and governance of flows together. The UN figures reveal the potential scale of losses, but are only a starting point. The challenge now is to obtain a verifiable assessment, establish continuous controls and ensure that state-financed cargoes reach the market they are intended to serve.