‘Inside Job’: Libya’s Leaders Directly Behind Multibillion-Dollar Fuel Heist

Report reveals how Libya’s current rulers orchestrated a three-year surge in fuel smuggling that cost the country about $6.7 billion in 2024 alone, with fuel being diverted to many foreign networks, including Russian military units in Libya and Mali, as well as to the genocidal Rapid Support Forces (RSF) in Sudan

 

November 13, 2025 (Washington, DC) – A major new investigation by The Sentry reveals that Libya’s own leaders drove a massive expansion of gasoline and diesel smuggling from 2022 to 2024 that cost the Libyan state billions of dollars.

The report, “Inside Job: Libya’s Fuel Smuggling Escalation,” exposes how the Haftar family in eastern Libya and figures linked to the Dabaiba family in the west of Libya have systematically exploited the nation’s bloated fuel subsidy program to siphon off more than half of all fuel procurements.

Spurring the surge was a pivotal 2021 policy change, when Libya’s National Oil Corporation (NOC) switched to an opaque crude-for-fuel swap mechanism. By keeping these swaps off the public balance sheets, the NOC was able to increase its fuel imports free of its previous financial constraints. As a result, in just three years, Libya’s imports more than doubled, with the main beneficiaries being transnational illicit networks, not the Libyan population.

The Sentry’s report identifies Saddam Haftar, the ambitious son of Field Marshal Khalifa Haftar, as the primary force behind this escalation. The Benghazi-based lieutenant general has reshaped the sector, using his Libyan Arab Armed Forces (LAAF) role to consolidate control over both maritime smuggling operations and crucial overland routes into sub-Saharan Africa. Culpability also extends to northwestern Libya, where The Sentry exposes the involvement of militias in Zawiyah, Tripoli, and Misrata, including armed groups linked to Prime Minister Abdelhamid Dabaiba.

Justyna Gudzowska, Executive Director of The Sentry, said: “Libya is being robbed in broad daylight. Almost $7 billion in subsidized fuel—about 15% of total public spending—was stolen annually in processes orchestrated by the very leaders that are supposed to be safeguarding Libya’s resources. Billions of dollars in public wealth that should fund hospitals, schools, and other essential infrastructure is instead lining private pockets. In a twist of bitter irony, citizens of one of the world’s richest oil nations are forced to wait in long lines at petrol stations and pay exorbitant black market prices for fuel. The networks profiting from this industrial-scale racket must be held to account.”

Oliver Windridge, Senior Advisor for UK and EU at The Sentry, said: “Those who brought about the extraordinary rise in Libyan fuel smuggling since 2021 are none other than the country’s current leaders. Every year, billions of dollars in stolen fuel fund Haftar’s dictatorship in the east, bankroll armed groups in the west, supply Russian military units in Africa, and enable Hemedti’s Rapid Support Forces in Sudan. The international community should stop kowtowing to these leaders and act decisively to combat the fuel smuggling rings they oversee.”

The consequences for the Libyan people have been devastating. The multi-billion-dollar scheme has deprived the central bank of the hard currency needed for essential imports like food and medicine, driving consumer price inflation and the dinar’s depreciation. While their corrupt rulers profit, ordinary Libyans across entire swathes of the country face chronic fuel shortages and exorbitant prices at the pump.

There is also a geopolitical dimension. The Haftar coalition diverts subsidized diesel, gasoline, and jet fuel to Russian military personnel entrenched at several air bases in Libya, who in turn ship it to other Russian missions in sub-Saharan Africa. The Haftar coalition has also been a strategic fuel supplier to the Rapid Support Forces throughout the ongoing civil war in Sudan, enabling the paramilitary group’s brutal and violent assaults. Neither the fall of al-Fasher in late October 2025 nor the horrific massacres of civilians that followed has changed that arrangement: the Haftar family continues to provide fuel to the RSF.

The Sentry’s new report establishes that this multibillion-dollar heist was orchestrated with assistance from foreign states, such as the United Arab Emirates, Russia, and Turkey.

 

Key Report Insights:

• Fuel smuggling cost the Libyan state almost $20 billion in three years, exacerbating hard-currency shortfalls, dinar depreciation, and fuel shortages for citizens while the Haftar and, to a lesser degree, the Dabaiba networks benefited.
• Russia’s military units and Sudan’s Rapid Support Forces benefit from smuggled fuel. Deliveries of diesel, gasoline, and jet fuel from the LAAF to Russian forces surpass what might be needed for for their operations in Libya, and regular cargo flights transport fuel from al-Jufrah and al-Khadim to Gao Airport in Mali, a known Russian-controlled facility. Meanwhile the RSF under Hemedti in Darfur is supplied via Kufrah and other key locales in eastern Libya. 
• Opaque barter turbocharged illegitimate imports. The NOC’s reliance on crude-for-fuel swaps from 2021-2024 detached the subsidy program from the Central Bank. Imports doubled to about 41 million liters per day by late 2024, and the NOC overpaid by up to $1 billion per year. And despite the March 2025 halt to the barter system, the issue of excessive imports continues.
• Saddam Haftar’s empire is growing. Through his senior LAAF remit, the Field Marshal’s powerful son controls ports, depots, and roads, as well as parts of the NOC bureaucracy. This concentration of power in Saddam’s hands has turned scattered fuel rackets into a massive, well-integrated illicit empire centered in eastern Libya.
• Maritime reexports continue. Benghazi’s old harbor serves as Libya’s principal channel for reexports, using doctored papers and “dark” vessels to move millions of liters per voyage. LAAF officer and Saddam subordinate Ali al-Mashay acts as the main gatekeeper.
• Diversion and taxation drive up prices in Southwest Libya. On land, particularly in the Libyan south, LAAF units ration legitimate sales of subsidized fuel, divert official tanker trucks, and tax small smugglers. As a result, in remote areas, Libyan citizens must often cough up 40 times the official subsidized price. The security authorities’ priority is to illicitly sell the fuel to foreign networks in neighboring countries.
• Collusion in the northwest hides significant volumes of diverted fuel. In western Libya, local warlords such as Zawiyah’s Mohammed Koshlaf and Misrata’s Omar Bughdada, who is known for his tight alignment with Prime Minister Dabaiba, move fuel by sea and by land, including large volumes pushed toward the Libyan south, where their LAAF counterparts take over.
• Fuel smuggling is deliberate, not clumsy management. Fuel smuggling is a deliberate revenue system: kleptocratic rulers wield undue influence over crucial functions within the NOC and the entire subsidy chain, using the proceeds to prop up allies and entrench themselves while blocking reform.

 

Key recommendations in the report:

• US, UK, and Canada: Investigate senior LAAF officer Ali al-Mashay (Ali Adulsalam Ahmed Bsabsa) and, if appropriate, designate him under respective global Magnitsky-style regimes for his pivotal role in role in Saddam Haftar’s multibillion-dollar fuel smuggling enterprise and the misappropriation of Libyan state assets on a massive scale
• US, EU, and UK: Investigate and, if appropriate, impose targeted sanctions on NOC subsidiary Brega Petroleum Marketing Company’s Finance Director Faraj al-Jaedi; Joint Force Leader Omar Bughdada; Brigade Tareq bin Ziyad leader Omar Mrajae al-Maqarhi; Battalion 87 officer Mohammed al-Mazughi; and Zawiyah Petroleum Facilities Guard leader Mohammed Koshlaf. Exclude these eastern- and western-Libyan officials from international cooperation and pursue a network approach that targets their enablers.
• US Treasury (OFAC and FinCEN) and partners: Assist Libya’s Attorney General in investigating the swaps concluded from 2022 to 2024 via a joint task force. Issue a business advisory warning US firms about the illicit networks exploiting Libya’s fuel subsidy program, including suspicious energy merchants, brokers, intermediaries, and transporters potentially involved in those schemes.
• Government of National Unity: Phase out the fuel subsidy in stages and replace it with a cash stipend that is disbursed directly to households, thereby removing financial incentives to engage in fuel smuggling.
• General Electricity Company of Libya: Adopt a clear, itemized fuel budget. Publish a plant-by-plant, public assessment of actual hydrocarbon needs and reduce reliance on liquid fuels. Subject GECOL’s finances to greater public scrutiny.

 

Read the full investigative report: https://thesentry.org/reports/inside-job-libya-fuel-smuggling/ 

For media inquiries, please contact: Jen Lonnquest, Deputy Director of Communications, [email protected]

About The Sentry
(Short descriptor for press use: “The Sentry, an investigative organization that tracks corruption.”)

The Sentry is an investigative and policy organization that seeks to disable multinational predatory networks that benefit from violent conflict, repression, and kleptocracy. Pull back the curtain on wars, mass atrocities, and other human rights abuses, and you’ll find grand corruption and unchecked greed. These tragedies persist because the perpetrators rarely face meaningful consequences. The Sentry aims to alter the warped incentive structures that continually undermine peace and good governance. Our investigations follow the money as it is laundered from war zones to financial centers around the world. We provide evidence and strategies for governments, banks, and law enforcement to hold the perpetrators and enablers of violence and corruption to account. These efforts provide new leverage for human rights, peace, and anti-corruption efforts. Learn more at: https://TheSentry.org