An official source in the Ministry of Finance of the Presidential Council has revealed that the draft budget for Libya for the year 2018 is to be approximately 42.5 billion Libyan dinars, the equivalent of 31.05 billion dollars.
The official said in a statement quoted by the New Arab website that the total oil revenues is expected to reach 22.5 billion dinars (16.5 billion dollars), while the revenues of customs and taxes is 2.5 billion dinars, in addition to 5.5 billion dinars rolled on from 2017.
The official, who declined to be named, said there was a deficit between spending and revenues of 12 billion dinars (8.7 billion dollars), which would be covered by a loan from the Central Bank of Libya.
The Libyan state is counting on raising oil production to reach between 1.3 and 1.5 million barrels per day next year, based on the price of 67 dollars per barrel.
The budget estimates for the proposed budget are divided into four sections, the first of which relates to salaries and wages of 21.6 billion dinars; the second section relates to public expenditures of 5.2 billion dinars; the third being government subsidies of 6 billion dinars and the fourth section includes 2.2 billion dinars set for emergencies to be used by the government in case of any deficits for spending.
The amount transferred from 2017 worth 5.5 billion dinars will be allocated to support the National Oil Corporation and General Electricity Company of Libya, the official said.
The decline in oil prices as well as the decline in Libya's crude production in recent years led to a deterioration in public finances in the country. Oil production represents 97% of budget revenues while Libya needs 30 billion dollars to cover public spending alone.
The price of the dollar in the black market is about 9.10 dinars, yet the official bank price is 1.37 dinar per dollar which is allocated for letters of credit for the import of food and medicine supplies only.
The Central Bank of Libya has recently introduced a program of economic reforms starting in 2018, which includes removing the subsidies on fuel and an amendment to the dinar exchange rate, which the authorities had reduced in 2002.