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Last month, claiming that the National Oil Company had been benefitting from corrupt sales, armed groups, the same that helped to overthrow the dictator colonel Muammar el-Qaddafi two years ago, have worked to restrict Libya’s oil industry.
In objection to the illicit dealings of the state-owned oil company, and in order to add power behind their demands to gain autonomy for the eastern regions of the country, the militias seized some of the country’s major oil export terminals and oil fields; trying to pressure the government to meet their demands.
The guards of the oil fields and facilities then took advantage and spread the protests west, making their own demands for higher wages from the government.
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Currently protests and strikes across the country have reduced Libya’s daily oil production to one-tenth its capacity, severely pressuring the economy, and affecting global oil supplies at a time when prices have already started to rise as a result of the problems in Syria, and other parts of the Middle East.
Oil is vital to the Libyan economy, accounting for 95% of the country’s export earnings, and 75% of the government’s total revenues, but the strikes are now costing an estimated $130 million a day in lost oil revenue.
On Wednesday, finally fed-up of the protests across his country, Prime Minister Ali Zeidan, issued arrest warrants for the strike leaders, hoping to bring an end to disruptions once and for all. “I won’t let anyone hold Libya and its resources hostage to these groups for long,” he said, although political analysts don’t believe that he will be able to enforce the arrests whilst most of the national military and police forces remain poorly trained and ineffective.
As protests grew in size, the local utilities had to reduce their levels of power generation, causing blackouts in much of the country.
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To try and facilitate an easier end to the protests the Libyan parliament agreed to increase wages of all civil servants, including the oil industry security guards, by 20%, and has appointed a committee to move from village to village, to negotiate with local councils and militia who support the protests.
David L. Goldwyn, the State Department coordinator for international energy affairs during Obama’s first term in office, explained that “the challenge for Zeidan is that it will be difficult to muster the force that will be necessary to make these arrests when some of the militias he would rely on are allied with the strikers.”
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com