Libya Cabinet Starts Spending $50B Budget Despite Falling Oil Revenues



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Libya's government, suffering from dwindling oil revenues, will allow its ministries to begin spending the $50 billion budget it submitted to parliament at the start of the year.

Reuters

TRIPOLI, June 11 (Reuters) - Libya's government, suffering from dwindling oil revenues, will allow its ministries to begin spending the $50 billion budget it submitted to parliament at the start of the year even though lawmakers have not voted on it.

The move might force the central bank to dip deeper into its reserves because the oil revenues that used to finance the budget have fallen to $1 billion a month, a quarter of what Libya used to make in the past.

Ten months of protests at oil facilities have reduced oil output to around 200,000 barrels a day, down from 1.4 million bpd in July when protests started.

The OPEC producer's parliament has failed to agree on a 2014 budget proposal worth around 60 billion Libyan dinars ($50 billion), according to lawmakers. The draft is slightly smaller than the 2013 budget worth 66.8 billion dinars.

Public finances could worsen in next few weeks after acting oil Minister Omar Shakmak said on Wednesday Libya had started directing crude from its two offshore fields to supply the Zawiya refinery, key to providing the capital with petrol.

The government gave no new export figure but this will bring exports closer to zero. The two fields had been the last left unhindered by protests.

"The country can produce 1.5 million bpd, but it was practically 100,000 bpd a few days ago, and I'm afraid now is even less," said Bernardino Leon, EU Special Representative for the Southern Mediterranean told a conference in Brussels.


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