Fuel Prices in Libya: Why Pumps Are Nearly Free
Libya has the cheapest gasoline on Earth. At roughly $0.023 per liter — about $0.09 per US gallon — a Libyan driver pays less for a full tank than most people anywhere else pay for a single coffee. In local terms, a liter costs around 0.15 LYD. That ranks Libya 1st out of 170 countries for the lowest pump prices in the world, well below the global average of about $1.484 per liter. Diesel is priced identically, at roughly $0.023 per liter.
How can fuel cost almost nothing?
The short answer is one word: subsidies. Libya is a major oil exporter — petroleum sits at the center of its economy, accounting for the overwhelming majority of government revenue and export earnings. Sitting on Africa's largest proven crude reserves, the country has long treated cheap domestic fuel as a kind of birthright for citizens, funded directly from oil income. Instead of taxing fuel the way most governments do, Libya does the opposite: it pours public money into keeping prices fixed at a tiny fraction of what the fuel is actually worth on world markets.
Because the price is set administratively rather than by the market, it barely moves even when global crude swings wildly. There is essentially no fuel tax baked into the pump price — the figure you pay reflects a political decision, not the cost of refining, importing, and distributing the product. The gap between the subsidized price and the true cost is enormous, and that gap is absorbed by the state.
The currency and import twist
Here is where Libya's situation gets complicated. Although it exports crude oil, Libya does not refine enough to meet its own domestic demand. Years of conflict damaged refining capacity, so a large share of finished gasoline and diesel is actually imported — and then sold domestically at a fraction of what was paid for it. That makes the subsidy doubly expensive: the state buys fuel abroad in hard currency and resells it for pennies in Libyan dinar.
The dinar's weakness against the US dollar amplifies the strain. Because imports are paid in dollars while pump revenue arrives in a soft local currency, every liter sold deepens the fiscal hole. This dynamic also fuels rampant smuggling: with prices this low, fuel is routinely siphoned across borders to be resold at market rates elsewhere, a chronic drain that successive Libyan governments have struggled to stop.
Is the trend likely to last?
No reliable price history is available to chart a clear trend, but the structural pressures are well known. Ultra-cheap fuel is a hallmark of oil-rich states that lean on subsidies — a club that includes Iran and Venezuela, both of which sit near the bottom of the global price table alongside Libya. Even fellow African oil producers like Angola charge noticeably more once their own subsidy reforms began to bite. The lesson across these economies is consistent: subsidies this generous are fiscally fragile, and pressure to raise prices tends to build over time, even if change comes slowly.
For now, though, Libya remains the global outlier. You can compare it against every other country on our world fuel prices overview to see just how far below the pack it sits.
FAQ
Why is fuel so cheap in Libya?
Libya is a major oil exporter that heavily subsidizes domestic fuel using oil revenue. Pump prices are set by the government at roughly $0.023 per liter — far below cost — rather than determined by the market or by fuel taxes.
How much does a gallon of gas cost in Libya?
About $0.09 per US gallon, based on a price of roughly $0.023 per liter (around 0.15 LYD). That makes Libya the cheapest country in the world for fuel out of 170 ranked, versus a global average near $1.484 per liter.
Does Libya produce its own gasoline?
Libya exports crude oil but lacks enough refining capacity to meet domestic demand, so it imports a large share of finished gasoline and diesel. It then sells that imported fuel domestically at deeply subsidized prices, which strains public finances and encourages cross-border smuggling.