Delays in release of funds from the Libya’s UN-backed government to the National Oil Corporation has hampered oil production and war-torn North African country is losing billions of dollars in lost oil revenues.

“The Financial Arrangements Committee of the Presidency Council needs to explain the delay because every day our country loses over $10m because of the shortfall, and that is money we will never recover,” NOC chairman Mustafa Sanalla said in a statement posted on the state energy company’s website.

Sanalla last month had warned that Libya will not be able to achieve its target of increasing oil output by five-fold this year unless the government invests in repairing the damage to the oil infrastructure. NOC, which had submitted its budget to the Presidential Council on 3 July, is still waiting for funds to be allocated.

The budget shortfalls, according to NOC calculations, have caused production losses totalling 35 million barrels, or 229,000 barrels a day (b/d), valued at $1.56bn at AGOCO and Sirte Oil fields alone, since the Presidency Council took control of spending in March.

Libya, the Opec member that holds Africa’s largest oil reserves, is currently producing 207,000 b/d, a fraction of the peak of 1.6 million b/d recorded before civil war erupted in the country. The government relies heavily on sale of oil for revenues and it has been facing serious cash flow issues following the disruption to oil exports.

“Let me make one thing very clear: blocking payments to NOC is harming the Libyan people,” he said in the NOC statement. “The money is there. The treasury would recover its investment in two to three months, as well as almost double its income.”

NOC, which is now a unified body after a merger of rival eastern and western factions, plans to bring oil output to more than 900,000 b/d by the end of the year, and to 1.2 million b/d within a year.

However, cash and security concerns make it difficult to achieve these targets. Storage capacity at the El-Sider oil terminal has gone down to 750,000 barrels, from 6 million barrels, due to attacks over the course of the revolution.

The UN-backed national unity government has been in place since March in an attempt to overcome those divisions. But it has been hobbled by political infighting and resistance from hardliners who reject its authority.