The head of the national assembly's finance and budget committee says Libya’s budget deficit has reached LD3.8bn ($3bn) due to lower government revenues, and warns of “very serious” consequences for the country.
The General National Congress (GNC) is discussing “emergency and immediate” measures to help the government deal with the continued fall in oil revenues, which has delayed the drafting of this year's budget.
The finance ministry has been given permission to allocate monthly budgets for the labour ministry as an interim measure until the 2014 budget is finalised.
Mahdi Genia says most public-sector workers will not receive a pay increase this year due to the oil crisis, which has significantly reduced the state’s revenue.
The prime minister’s office has summarised the funds it provided to ministries during 2013, which appear to be some 25% below the total amount set out in last year's budget and 14% below spending in 2012.
The organisation estimates that Libya's economy shrank by 6% last year thanks to problems in the oil sector, a sharp drop from the 15% growth it projected last June.
Libya's consumer price index rose by 2.6% in 2013, according to figures published by the Central Bank, down from 6.1% in 2012.
The finance committee of the General National Congress (GNC) held a meeting with the interior ministry to discuss its financial situation and "very high" wage bill for 2013.
The government has formed a committee, comprised of five ministers, to review contracts that were signed prior to the revolution and outline a budget for priority projects.
The Libyan government is reportedly seeking to cash letters of guarantee on contracts for Turkish companies which were forced to halt works due to the 2011 conflict.
The government has approved plans to establish four new landfills near Tripoli, Benghazi and Sebha, with a reported budget of LD200m ($160m).
In another sign of deteriorating state finances, the government has given permission for the Price Stabilisation Fund (PSF) to borrow from commercial banks to meet its contractual obligations.
Libya's Minister of Economy, Mustafa Abu Fanas, says the government has not yet drawn on Central Bank reserves but will be forced to do so if oil port closures continue.
The government has asked the General National Congress (GNC) to approve a preliminary budget of LD250m to LD300m ($200m to $240m) for a new development fund for the town of Derna in eastern Libya.
The Central Bank of Libya (CBL) had admitted for the first time that it has spent significant sums on covering the shortfall in oil revenues, highlighting the severity of the state's financial crisis.