Tripoli-Based GUN Announces Oil Sector Salaries

The Tripoli-based Government of National Unity (GUN) has transferred May salaries for various sectors, including the oil sector, to the Central Bank of Libya. This was reported by the information site "Al Wasat", explaining that the total salaries for the month of May National Oil Corporation (Noc) amounts to 327,5 million dinars (97,8 million euros) and the delay in payment was attributed to "technical and administrative issues", effectively shifting the responsibility onto the Central Bank. The Noc greeted with irony the delays in the payment of its employees' salaries. Yesterday, the state oil company said it was "pleasantly surprised" by the failure to pay May and June salaries for its 65 workers, forced to find "increasingly innovative and creative ways" to survive. Farhat Bengdara, president of the Noc, addressed the Ministry of Finance of the Tripoli government, requesting the payment of salaries for both the company and its affiliated companies. Bengdara, explains "Al Wasat", defined the delay as "unjustified" because the NOC regularly transfers the oil revenues collected to the accounts of the Ministry of Finance, holding the latter fully responsible for the delay in a vital sector that represents 95 percent of general state revenue.

In reality, the large quantities of money that Libya obtains from the sale of hydrocarbons (oil, gas, condensates) end up in the accounts of the Libya Foreign Bank, 100 percent owned by the Central Bank. These funds are then spent across four budget chapters – salaries, grants, operating expenses and development projects – which theoretically should include all regions of the country. Authorization for expenditure is entrusted to the Ministry of Finance, followed by planning carried out by the Ministry of Planning. But the budget of the Government of National Unity in Tripoli has never been approved by the House of Representatives which meets in Benghazi. To overcome this dilemma, a temporary monthly exercise is in force, which allows spending up to one twelfth of what was foreseen in the previous year's budget each month. However, the Central Bank recently criticized the expenses of the Tripoli government led by the prime minister Abdulhamid Dabaiba, fueling fears of the outbreak of a new conflict for the grabbing of resources between the east and west of the country.

Today's Libya is administered by two rival political-military coalitions: on the one hand the Government of National Unity based in Tripoli of Prime Minister Dabaiba, recognized by the international community and supported above all by Turkey; on the other, the so-called National Stability Government led by Osama Hammad, prime minister designated by the House of Representatives, effectively a parallel executive based in Benghazi managed by General Khalifa Haftar. To break the political stalemate, the UN envoy Abdoulaye Bathily launched, on 27 February 2023, a plan to draft the constitutional amendments and electoral laws necessary to hold "free, inclusive and transparent" elections by 2023. However, the plan failed and Bathily resigned on April 16th.

It is worth remembering that in Libya spending on salaries covers about two thirds of the national budget. According to the Central Bank's latest statement relating to the first five months of the current year, the expenses of chapter one (salaries, however excluding those of May) amounted to 20,4 billion Libyan dinars (approximately 3,9 billion euros ), while the expenses of chapter two (administrative expenses) were equal to 1,1 billion Libyan dinars (approximately 209 million euros). Chapter four (support) expenditure amounted to 4,4 billion Libyan dinars (approximately 836 million euros). Furthermore, there were 4,4 billion Libyan dinars (approximately 836 million euros) in outstanding financial deals for the National Oil Corporation and 2,5 billion Libyan dinars (approximately 475 million euros) for the General Electricity Company.

Oil revenues, as is known, represent the vast majority of Libyan revenues. In fact, in the same period, the Central Bank of Libya announced revenues of 43,7 billion Libyan dinars (around 8,3 billion euros), of which 36,8 billion Libyan dinars (around 7 billion euros) of revenue oil companies, while royalties brought in 6 billion Libyan dinars (around 1,1 billion euros). The taxes collected amounted to 121 million Libyan dinars (around 23 million euros). Customs revenue was 123 million Libyan dinars (around 23,4 million euros), communications revenue was 11 million Libyan dinars (around 2 million euros) and revenue from the sale of fuel in the local market totaled 32 million Libyan dinars (approximately 6,1 million euros). Other revenues, which include refunds, passport taxes, car tax, fines and other taxes, reached 639 million Libyan dinars (around 121,4 million euros).