Ameer Randolph
Libya is a key player in Africa's oil industry, with vast crude oil reserves and a thriving diesel market. However, the country's political instability and conflict have disrupted fuel distribution networks, leading to a thriving black market for diesel fuel. While some diesel is smuggled across borders, much of it is sold within Libya, impacting ordinary Libyans who face shortages and long waits at petrol stations. Libya's diesel market is expected to recover as the country stabilizes, driven by increasing domestic demand for transportation and industrial applications.
| Characteristics | Values |
|---|---|
| Diesel market in Libya | A crucial component of the country's economy |
| Diesel fuel sources | Domestic refining |
| Diesel consumption | Used in heavy commercial vehicles and machinery, crucial for the transportation and agricultural sectors |
| Diesel fuel types | Type 1 for on-road vehicles, marine engines, and locomotives; Type 2 for marine and industrial applications; Type 3 for agricultural machines and other non-road vehicles |
| Diesel fuel storage | Stored in clean, dry, and well-ventilated tanks, away from residential areas with a nitrogen blanket to prevent oxidation |
| Diesel fuel maintenance | Regular maintenance to ensure proper engine functioning, including fuel and oil changes, and engine cooling system checks |
| Diesel fuel price | 0.15 Libyan Dinar per liter for octane-95 gasoline |
| Diesel fuel availability | Supplied through mobile petrol stations in conflict-hit areas; shortages due to distribution issues and smuggling |
| Diesel fuel smuggling | Diverted to the black market within Libya and cross-border to Tunisia, Chad, Niger, and Sudan |
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What You'll Learn
Diesel fuel types and their uses
Diesel fuel, also known as diesel oil, heavy oil, or simply diesel, is a liquid fuel designed for use in a diesel engine, which is a type of internal combustion engine. Rudolf Diesel first experimented with diesel fuel for his compression-ignition engine in the 1890s. The most common type of diesel fuel is derived from petroleum, but alternative sources like biodiesel, biomass-to-liquid (BTL), and gas-to-liquid (GTL) diesel are becoming more popular.
Diesel fuel is categorised into different types, each suited for specific uses and conditions. The three main classes of diesel fuel are 1D (#1), 2D (#2), and 4D (#4), which differ in viscosity and pour point. 1D has the lowest viscosity and pour point, making it ideal for cold weather. 2D is the most common type found at gas stations and is better suited for warm weather. It has a higher energy density, making it the preferred choice for truck drivers. 4D is thicker and intended for low-speed, off-road industrial equipment and is not suitable for most consumer vehicles.
Biodiesel, made from renewable sources like vegetable oil, can be mixed with any grade of fuel to reduce emissions and improve lubrication. It is considered more environmentally friendly than traditional diesel. Synthetic diesel is another alternative, free of sulfur and many petroleum byproducts, offering a cleaner-burning option with minimal carbon emissions.
The choice of diesel fuel grade depends on climate, engine specifications, and manufacturer recommendations. Using the wrong fuel grade can lead to higher fuel consumption, increased operating costs, reduced engine power, and higher emissions. Diesel fuel is used in various applications, including heavy equipment such as tractor-trailers, delivery trucks, construction equipment, buses, and industrial machinery.
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$64.25 $82.67
Black market diesel
Libya's black market for diesel is a symptom of the country's dysfunctional fuel sector. Libya produces only 30% of the diesel it consumes, importing the remaining 70%. The country's fuel distribution network is in disarray, with militias controlling the market. As a result, it is difficult to determine how much diesel is being diverted to the black market, but estimates suggest it could be as high as one-third of the total supply.
The black market for diesel in Libya has multiple sources. In some cases, fuel that has reached a legitimate recipient is diverted to the black market. Armed groups may requisition fuel as part of their official supply, only to sell it on illegally. Traders may also offer to buy allocations from the owners of official stations, which they then sell on at a profit. Diversion of fuels intended for institutional clients, which account for around 90% of diesel supplies, is also a significant issue.
Fuel smuggling costs the Libyan economy $750 million annually, according to the National Oil Corporation (NOC). The diesel smuggled out of Libya does not only cross land borders; it is also transported by sea. Some tankers can load up to three million litres of diesel, which is then sold on the black market. The price of diesel on the black market has dropped since 2012, but it remains a profitable business.
The growth of the black market for diesel within Libya has impacted cross-border smuggling. Increased border security in Tunisia and higher black-market prices in Libya have made it more difficult for smugglers to transport fuel across the border. This has had a significant impact on the economy in southern Tunisia. However, some fuel continues to be smuggled to Chad, Niger, and Sudan. Armed groups from these countries operating in Libya are allegedly paid in fuel, which they then transport back to their countries of origin to sell at a profit.
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Diesel smuggling to Chad, Niger and Sudan
Libya is an oil-rich country that is supposed to provide cheap, subsidised fuel to its citizens. However, due to continuing violence and instability, up to one-third of its fuel supply—approximately 1.3 million tonnes—is diverted to the black market each year. This has led to fuel shortages and a thriving black market within Libya, which has reduced cross-border smuggling.
Despite this, fuel continues to be smuggled from Libya to Chad, Niger, and Sudan. Armed groups from these countries operating in Libya are allegedly paid in fuel, which they then transport back to their countries of origin to sell at a profit. This dynamic has been observed in the case of a prominent smuggler, Fahmi Salim Ben Khalifa, known as "The Boss". Before becoming a fuel smuggler, Khalifa smuggled drugs, achieving such notoriety that one side of the port in his hometown of Zuwara became known as "Fahmi's port".
Since the outbreak of the war in Sudan, 150,000 refugees have fled to Chad as of June 2023. This has led to a spike in fuel and arms smuggling from Chad into Sudan, threatening to prolong and intensify the conflict. Chadian rebel groups are veterans of the region's criminal economies, including drug, arms, car, and people smuggling. They possess crucial knowledge of cross-border areas, which they exploit for smuggling operations. Evidence suggests that some Chadian fighters have travelled to Khartoum from southern Libya to join the RSF in fighting against SAF forces. The incentive for this move is the opportunity to access stolen vehicles, weapons, and equipment, as well as the allure of criminal opportunities.
The conflict in Sudan has also impacted migrant smuggling economies in Libya and the Sahel. Displaced individuals initially settle in Sahelian countries or in Libya, increasing demand for northbound smuggling services to Libya. Over time, growing displacement may also increase demand for sea crossings from Libya to Europe. The ripple effects of the war in Sudan on migrant smuggling economies may only be felt in the coming years due to long asylum application processing times in neighbouring states.
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Diesel tanker trucks in conflict areas
Libya is a country rich in oil, but it has limited refining capacities. As a result, fuel is heavily subsidised by the government, which has led to a thriving black market for smuggled fuel. Diesel is a key part of this trade, with institutional clients accounting for around 90% of the supply.
In conflict-hit areas of western Libya, the government has deployed mobile petrol stations to serve motorists who are unable or unwilling to access regular petrol stations. Truck drivers have been reluctant to deliver fuel to petrol stations in these areas due to security concerns. The Brega Petroleum Marketing Company (BPMC), owned by the state oil firm NOC, has sent fuel tanker trucks to these areas. However, it is unclear how much of this fuel reaches its intended destination, as fuel diversion to the black market is common.
Armed groups may requisition fuel as part of their official supply, filling large tanks within their bases and then selling it on illegally. Traders may also offer to buy allocations from the owners of official stations, which they then sell at a profit. This diversion of fuel intended for institutional clients is a significant issue, impacting electricity supply and contributing to power cuts.
Smuggling of Libyan fuel across international borders is a longstanding issue, but the dynamics of this trade have changed in recent years. Previously, much of the smuggled fuel was sold in neighbouring countries like Tunisia, where fuel is more expensive. However, increased border security and the growth of the black market within Libya have led to a reduction in cross-border smuggling. Instead, much of the diverted fuel is now sold within Libya, with black market prices rising significantly.
Benghazi, a key commercial port in eastern Libya, has become a bustling illicit fuel export hub. An investigation by Lloyd's List identified 42 tankers over two years that made at least 195 journeys to Benghazi's old harbour. These tankers play a key role in ferrying refined petroleum products out of Libya, contributing to the country's state of crisis.
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Diesel prices in Libya
Libya is known for its oil, but the country has limited refining capacities, and fuel shortages are common. Fuel is heavily subsidized in Libya, and diesel prices are significantly lower than the global average. As of June 2025, the price of diesel in Libya was 0.15 Libyan dinars per litre, while the global average was 6.43 Libyan dinars.
Due to the low prices, fuel smuggling is a lucrative business, costing the Libyan economy an estimated $750 million annually. Fuel is often smuggled into neighbouring countries like Tunisia, where fuel is much more expensive. However, increased border security and the growth of the black market within Libya have led to a reduction in cross-border smuggling. Instead, much of the smuggled fuel is now sold within Libya, with ordinary Libyans suffering as a result of fuel shortages and the state's inability to manage its finances.
Fuel diversions from the formal distribution network have also impacted institutional clients, who account for around 90% of the supply of diesel. Armed groups may requisition fuel for their official supply and then sell it illegally, while traders may buy allocations from official stations to sell at a profit. This has contributed to power cuts of up to 18 hours a day during the Libyan summer.
To combat fuel shortages in conflict-hit areas, the Brega Petroleum Marketing Company (BPMC) has deployed mobile petrol stations to serve motorists on the streets. Despite Libya's oil wealth, motorists often have to line up for most of the day to get gasoline, reflecting the dysfunction in the fuel sector.
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Frequently asked questions
Diesel fuel in Libya can be obtained from mobile fuel stations, petrol stations, or the black market.
Mobile fuel stations are tanker trucks sent by the Brega Petroleum Marketing Company (BPMC) to serve motorists in conflict areas where truck drivers are reluctant to deliver fuel to petrol stations.
Libya heavily subsidizes petrol, which creates an opportunity for fuel to be smuggled abroad or sold on the black market within the country. Armed groups may also sell fuel illegally, and fuel intended for institutional clients is often diverted to the black market.
