At a time when many countries are grappling with soaring fuel prices, Libya stands out globally for selling petrol at the lowest official rate anywhere, just about $0.03 per litre. In June 2025, the world average for petrol (Octane-95) was around $1.29 per litre, making Libya’s price roughly 42 times lower than the global mean.
A Subsidized Fuel Paradise
The astonishingly low cost of petrol in Libya stems from a unique combination of vast oil reserves and a state-controlled subsidy system. Libya holds Africa’s largest proven oil reserves and produces enough crude oil domestically to supply its refineries without relying on imports. Leveraging this advantage, the Libyan government sells petrol to consumers at LD 0.150 per litre, equal to around $0.028–$0.03, while imposing little to no taxes on it.
This pricing strategy is not merely an economic policy—it’s a political choice. Analysts describe Libya’s approach as one where fuel is treated as a basic public entitlement, not a commercial commodity. The state absorbs the cost difference between domestic pump rates and global market values by keeping prices artificially low.
In contrast, non-oil-producing or wealthier nations, such as South Africa ($1.18/L), impose hefty taxes on fuel, pushing prices higher to fund public spending. Even fellow African oil producers like Angola ($0.33/L) and Algeria ($0.35/L) offer fuel at rates significantly higher than Libya. Despite its production status, Nigeria currently averages around $0.53/L.
Subsidy Comes at a Heavy Cost
Libya’s fuel subsidies come with a staggering financial burden. Between January and November 2024 alone, the Libyan state spent 12.8 billion dinars (roughly $2.7 billion) on fuel subsidies. This is despite the country’s struggling economy and political instability.
While the subsidy keeps pump prices affordable, it simultaneously drains state coffers and distorts the local energy market. Long queues are a common sight at filling stations in cities like Misrata, where fuel availability often falls short of demand. In extreme cases, when state-run stations run dry, petrol is available only on the black market—sometimes at up to 15 times the official price.
Chatham House researchers report that Libyans may spend hours in line for subsidized fuel, and in remote areas, it can cost $4–$53 to fill a tank due to scarcity and illicit market activity.
Fuel Smuggling and Internal Leakages
The discrepancy between Libya’s fuel prices and those of neighboring countries has created a booming smuggling industry. Criminal networks routinely transport heavily subsidized petrol across borders to sell at market rates, costing the Libyan economy an estimated $5 billion annually, according to a World Bank estimate.
What’s worse, internal inefficiencies mean a large portion of the subsidized fuel doesn’t even reach consumers. Chatham House reports indicate that up to one-third of state-allocated fuel never makes it to official pumps, either due to diversion or wastage.
Cheap, But Not Without Consequences
Libya’s status as the world’s cheapest petrol provider comes with a paradox. While the pricing benefits everyday citizens, it also sustains a broken system marked by corruption, inefficiencies, and economic vulnerabilities. The policy keeps fuel “affordable,” but it also fuels an underground economy and imposes a growing fiscal burden on the state.
The result? A society where petrol is both incredibly cheap and frustratingly hard to access.
Libya’s Fuel Paradox
Libya’s government has turned oil wealth into ultra-cheap gasoline for its citizens, pricing petrol at just $0.03 per litre, the lowest globally by a wide margin. This feat is enabled by vast oil reserves, minimal taxes, and aggressive subsidies. But the low price tag comes at a cost: supply shortages, rampant smuggling, and a subsidy bill that strains the nation’s economy.
Libya’s example shows that cheap fuel isn’t always a sign of prosperity; it can also reflect deeper structural problems masked by oil wealth.
