Libya’s public finances, wracked by a dramatic loss in oil revenue that has been exacerbated by a power struggle between rival governments, are foundering, according to reports issued yesterday.

The crisis has prompted the authorities in Tripoli, who control much of western Libya, to plan cuts to petrol subsidies, to delay public salary payments and to ban imports from cars to steel.

And it has already been forcing the central bank – which is treading a fine line between rival governments and funds the whole country – to burn through its foreign reserves. Libya needs $30 billion to fund imports annually and typically spends $40 billion on its budget.

“Libya is on the verge of economic and financial collapse,” UN Special Envoy Bernadino Leon, who has been trying to end a power struggle between the two governments, is insisting.

Crisis has prompted Tripoli authorities to plan cuts to petrol subsidies, delay public salary payments and ban certain imports

Since last year, the central bank has frozen infrastructure projects, limited spending to basic public salaries and food and petrol subsidies.

This has led civil servants, the biggest workforce in Libya, now to say they have not been paid for at least two months and accuse the central bank of not providing local lenders with liquidity to issue paychecks.

“We don’t have a budget,” said Colonel Abu Breeda, deputy head of Libya’s police unit combatting illegal immigration. “I am the head of the department but what’s the point? Salaries? Nothing. There are delays everywhere.”

The economy is essentially being hit on two sides. The dinar currency has lost 35 per cent of its value against the dollar since January alone. Oil production, meanwhile, has fallen to 400,000 barrels a day, or a quarter of what was the case before an uprising toppled Muammar Gaddafi in 2011.

Libya has earned only $5.5 billion so far in oil revenue fighting between the rival factions and Islamic State attacks have shut down major oilfields and ports, said Husni Bey, head of one of the biggest private firms and importers. But the country needs $3.5 billion every month, he said.

The internationally recognised government of Prime Minister Abdullah al-Thinni sits in the eastern town of Bayda while the parliament uses a naval base in Tobruk. Some 1,200 km (750 miles) to the west, a rival faction from Misurata and other western regions called Libya Dawn seized Tripoli in August, reinstating a previous assembly and setting up an alternative parliament.

This government recently banned the import of 32 goods for six months. The list includes anything from cars, carpets to construction materials such as cement and as well as fruit juices, energy drinks and even the national passion Harissa, a hot pepper paste.

But the ban has so far failed to halted a decline of the dinar which lost further ground this week on the black market as people ramped up food shopping ahead of the Muslim fasting month starting in mid-June. Libya imports most of its food.

A dollar now buys up to 2.17 dinars on the parallel market, compared with the official rate of 1.3.