Libyans fear reform as IMF calls for end to decades-old petrol subsidy

Libya's fuel subsidy system, one of the world's most inefficient, according to a new International Monetary Fund report, is costing the country billions annually.
With petrol priced at less than three US cents per litre, the subsidies consume nearly a third of Libya's national budget whilst barely benefiting ordinary citizens.
The IMF urges a gradual phasing out of the scheme, replacing it with direct cash payments to families. However, powerful armed groups profiting from fuel smuggling may oppose reforms, potentially leading to violence.
Despite having Africa's largest crude oil reserves, Libya imports most of its fuel due to inadequate refinery capacity.
The subsidies have led to widespread smuggling, with an estimated 30 percent of imported fuel being illicitly exported.
Critics argue that subsidy reform requires building trust between the government and citizens, a challenging task in a country plagued by over a decade of conflict and political divisions.

Al Jazeera's Malik Traina reports from Misrata, Libya.

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