Supporters of a federal system in Libya have set up a company to sell oil from terminals they have taken over in the east of the country, in the latest challenge to the government, according to AFP.
The announcement was made late Sunday by the Cyrenaica Political Bureau, an group that set up in October its own government in the east in defiance of the central authorities.
"The executive bureau of Cyrenaica decided on the creation of a petrol and gas company which will have its temporary headquarters in the town of Tobruk," said self-proclaimed government head Abd Rabbo al-Baraassi.
Speaking at a news conference in the eastern town of Ajdabiya, Baraassi went as far as claiming that a central bank would be established in the same region.
Protesters, including ex-rebels given the task to gaurd the country's major ports., have blockaded the country's main oil terminals at Zueitina, Ras Lanouf, and Al-Sedra in eastern Libya since July.
The government has openly accused the guards, some of whom are calling for a federal Libya, of trying to sell crude oil behind their banks.
In return, they have accused the government of rampant corruption in its handling of oil sales.
Since the ouster of Moamer Kadhafi in 2011, authorities have struggled to quell rising lawlessness and impose their authority.
Militias made up of rebels who fought Kadhafi have refused to forego their arms in defiance of the government in Tripoli, carving out fiefdoms in a country rampans with weapon and weapons.
Last wee, the government in Tripoli said companies were trying to buy Libyan oil outside of the official channels and threatened to use force against those responsible.
And on Sunday, Prime Minister Ali Zeidan said the guards must end their blockade in ten days, without saying how the government would enforce the deadline.
The protests have caused production to hit rock bottom.
Federalists in Libya base their self-procliamed legitimacy from the 1951 constitution that divided the country into three administrative regions: Tripolitania in the west, Cyrenaica in the east and Fezzan in the south. Federalism was scrapped in 1963, but since the Arab Spring tides that reached Libya and kiled Al-Qaddafi, there have been some calls to reintroduce the system.
But Libyan analysts say it would be difficult for a federal system to take root, especially in Benghazi, where militias hostile to federalism control large swathes of the city.
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