BENGHAZI - Supporters of a federal system in Libya have set up a company to sell oil from terminals they have seized in the east, in the latest challenge to the government.
BENGHAZI – Supporters of a federal system in Libya have set up a company to sell oil from terminals they have seized in the east, in the latest challenge to the government.
The announcement was made late Sunday by the Cyrenaica Political Bureau, an autonomous group that set up in October its own government in the east in a move that angered the central authorities.
“The executive bureau of Cyrenaica decided on the creation of a petrol and gas company which will have its temporary headquarters in the town of Tobruk,” said self-proclaimed government head Abd Rabbo al-Baraassi.
Speaking at a news conference in the eastern town of Ajdabiya, Baraassi also said a central bank would be formed for the region.
Protesters, including ex-rebels tasked with guarding Libya’s key installations, have blockaded the country’s main oil terminal at Zueitina, Ras Lanouf, and Al-Sedra in eastern Libya since July.
The government has openly accused the guards, some of whom are calling for a federal Libya, of trying to sell crude oil.
But the strikers have accused the government of corruption in its handling of oil sales.
Since the ouster of Moamer Kadhafi in 2011, authorities have struggled to quell rising lawlessness and impose their authority.
Militias made up of rebels who fought Kadhafi have refused to lay down their arms in defiance of the government in Tripoli, carving out fiefdoms in a country awash with weapons.
Last wee, the government in Tripoli said companies were trying to buy Libyan oil outside of the official channels and threatened to use force against those responsible.
And on Sunday, Prime Minister Ali Zeidan said the guards must end their blockade in ten days, without saying how the government would enforce the deadline.
The protests have caused production to drop to around 250,000 barrels per day, compared with 1.5 million bpd before the crisis, according to the National Oil Company, causing estimated losses of $13 billion (10 billion euros).
Backers of a federal Libya say they are acting on the basis of the 1951 constitution that divided the country into three administrative regions: Tripolitania in the west, Cyrenaica in the east and Fezzan in the south.
Federalism was scrapped in 1963, but since Kadhafi’s ouster, there have been some calls to reintroduce the system.
But Libyan analysts say it would be difficult for a federal system to take root, especially in Benghazi, where militias hostile to federalism control large swathes of the city.