Libya may find it difficult to cover its budget expenditure next month or the one after unless strikes blocking oil ports and fields end, Prime Minister Ali Zeidan said yesterday.

A mix of militias, tribes and civil servants seeking political rights or higher pay have seized oil ports and fields across the Opec producer, knocking down output to a fraction of its capacity of 1.25 million barrels a day.

“The budget is based on the assumption that oil revenues flow for the (full) year,” Zeidan told reporters. “From next or the following month, there could be a problem covering expenditures.”

Zeidan said the government had given the protesters a week to 10 days to clear the blocked oil fields and ports. “Otherwise, we will take measures,” he said, declining to be more specific.

He said the blockage of the Mellitah terminal in Western Libya was threatening to halt the supply of gas through an undersea pipeline to Italy. The complex is owned by Italy’s ENI and Libya’s state-owned state National Oil Corp (NOC).

Protesters have already stopped oil exports from Mellitah and have threatened to halt gas exports from there too.

Later yesterday an autonomy movement in eastern Libya that has seized several oil ports said it had unilaterally formed a regional oil firm in a direct challenge to the central government in Tripoli.

The firm would be temporarily based in Tobruk in the far east, where protesters have seized an oil port and on Friday blocked a government-chartered tanker from loading oil, leaders of the group said.

There could be a problem of covering expenditures

Meanwhile gunmen killed two policemen in Benghazi in eastern Libya on Saturday, a security source said, a day after the army had vowed to restore order in the port city hit by bombings and assassinations.

Security in Benghazi, an important part of Libya’s oil infrastructure, has deteriorated in the past few months with militants and Islamists roaming unchallenged, highlighting the upheaval two years after the fall of Muammar Gaddafi.