Strikes at major ports and oilfields and drying up oil exports are undermining Libya's ability to pay public salaries and deter foreign investment, the country's labor minister said on Wednesday.
Militias and tribesmen have seized ports and oilfields across Libya to press for political or financial demands, cutting output to around 220,000 bpd from 1.4 million bpd in July. Oil is the main source for the budget and for the funding of food imports.
Western powers fear the North African country will slide into instability as the government struggles to rein in militias that helped topple Moammar Gadhafi in 2011 but kept their arms.
"There's a huge impact of this strike issue," Labor Minister Mohamed Swalin told a news conference. "Salaries for Libyans are now at risk."
The strikes would lead Libya into a "dark tunnel" and deter the return of foreign companies that left during the 2011 uprising.
Oil pipelines and production facilities as well as exploration efforts would be also affected should the blockages continue, he said.
The government has put pressure on tribal leaders in East Libya to persuade an armed autonomy group to lift the blockage of the Ras Lanuf, Es-Sider and Zueitina ports, previously accounting for 600,000 bpd.
But autonomy leader Ibrahim Jathran said at the last minute that talks with Tripoli to gain a greater share of oil revenue for the east had failed.
There has also been no progress toward reopening Hariga port in the far east, despite an announcement by a local oil official last week that the terminal would resume exports within days.
In another conflict, members of the petroleum protection force threatening to block a gas pipeline from eastern Libya to Tripoli said they would give the government another day to meet their salary demands.
The protesters had said on Sunday they would halt gas flows by Tuesday but a spokesman for them told Reuters they had agreed to extend the deadline until Thursday as tribal leaders wanted to meet them.
A blockage would worsen power supplies, the state power company said in a statement. Outages have hit Tripoli and other major cities for weeks.
Prime Minister Ali Zeidan has said the government will act against the oil strikes but its nascent army, still in training, is too weak to tackle heavily armed protesters, analysts say.