Spike in fuel and electricity costs puts crunch on Libyan consumers

Libyans say the government's decision to raise fuel and electricity prices will cause the cost of living to soar, but Prime Minister Shukri Ghanem insists the hikes are needed to lift the economy out of the doldrums. At the beginning of May, the price of fuel at the pump jumped 30 percent, and the price of electricity has doubled for consumers of more than 500 kilowatts per month.
"One can't spend too much time fussing over what people want when we need to lift Libya's economy out of stagnation that has paralysed this country for years," Ghanem told AFP.
The prime minister said the government spends 7.5 million dinars (4.8 million dollars) a year to subsidise a list of goods.
"We have to bring prices closer to what the goods actually cost, little by little," he said.
The plan is part of Libyan leader Moamer Kadhafi's June 2003 decision to privatise many public companies and bring an end to the interventionist economy.
Libya endured years of economic sanctions because of international allegations that Tripoli sponsored terrorism.
The North African country is governed by a socialist regime, crafted by Kadhafi who since last year has mended fences with the West.
"My salary is less than 160 dollars a month," said Al-Hadi al-Mabrouk, a teacher.
"Fuel and electricity are eating up a third of that, so what do I have left to support my four children?" he asked, adding that salaries have not risen in 30 years.
The prime minister says salary hikes are decided on by legislators.
"The decision to raise salaries is not up to me. It's parliament's duty to amend the law in this area," he said. According to the dean of Tripoli's economics faculty, Hafez al-Shuwaili, the previous prices were compatible with the average Libyan annual salary of less than 3,000 dollars."But when the government decided to change politics and stop subsidising goods, prices soared and it created an imbalance because salaries didn't rise along with costs," he said.
"This measure wasn't studied and was imposed too quickly," charged Shuwaili.