Fuel smuggling in Libya is costing the north African country more than $750 million annually, said the head of the National Oil Company.
NOC president Mustafa Sanalla called on Wednesday a European Union naval mission to combat smugglers by seizing their ships in the Mediterranean, said the United Nations should consider sanctioning smugglers and urged Libya to reform massive subsidies that allow fuel to be sold for as little as 2-3 US cents per liter.
"The impact of fuel smuggling is destroying the fabric of the country," he said according to the text of a speech delivered at a conference on oil and fuel theft in Geneva.
"The fuel smugglers and thieves have permeated not only the militias which control much of Libya, but also the fuel distribution companies which are supposed to bring cheap fuel to Libyan citizens," he said.
"The huge sums of money available from smuggling have corrupted large parts of Libyan society," Sanalla added.
The state-run NOC was looking at adding molecular markers to subsidized fuel, to help Libyan and international law enforcers including Europol, CEPOL and Interpol identify smugglers, he said.
Fuels can be tracked by using chemical markers that bind to fuel molecules.
Smuggling networks have flourished amid the political turmoil and armed conflict that developed following Libya’s 2011 uprising. Groups are often involved in multiple types of smuggling, making huge profits from illicit sales of fuel and the transfer of migrants toward Europe.
Before the revolt Libya, with estimated oil reserves of 48 billion barrels, used to produce 1.6 million barrels per day (bpd).
But output fell to less than 500,000 bpd between 2014 and 2016 due to violence around production facilities and export terminals as rival militias fought for control of Africa's largest crude reserves.
No oil was exported from Libya's main ports until September 2016 with the reopening of the Ras Lanuf terminal in the country's so-called oil crescent.
The recovery of oil production and exports is key to restoring Libya's moribund economy.
Sanalla urged Libya's "friends, neighbors but above all the Libyan people themselves... to do everything they can... to eradicate the scourge of fuel theft and fuel smuggling".
Action taken so far — including Italian prosecution and US sanctions against smuggling networks and a ditch and berm built by Tunisia on its border with Libya — had “not been enough to create a major disincentive for the fuel smugglers”, he said.
He called for the mandate of the EU’s naval mission, Operation Sophia, to be extended to combat the smuggling of refined fuel as well as oil, saying that much of the illegal activity could be traced by radar or satellite and was concentrated at Hurd’s Bank anchorage just outside Maltese territorial waters.
