Syrians faced a new economic shock two days ago after the Syrian Petroleum Company raised the prices of various petroleum products and fuels by up to 30%.
While official bodies justified the measure by citing “pressures from global supply costs and fluctuations in oil prices,” its negative repercussions have begun affecting citizens, amid warnings from experts of severe knock-on effects on the prices of basic goods in the local market, placing Syrians’ purchasing power before an unprecedented test.
University professor and economic expert Majdi al-Jamous told Enab Baladi that the issued decisions place the burdens on the people, as usual, while governments are supposed to exist to serve the people.
Between “Socialist” and “Free,” Syrians Chase the “Illusion” of Economic Justice
Al-Jamous said the former regime adopted a socialist economy to achieve social justice, which Syrians never experienced, while the current government has adopted a free economic system, and citizens have also not felt any of its known advantages.
A free economic system, according to al-Jamous, is supposed to create intense market competition, which should reflect positively on prices and the availability of goods, in addition to investments and job opportunities. “We have not had any of that,” he said, considering that citizens receive nothing from these economic systems except their “resounding” titles.
The economic expert added that what Syrians have known so far about the free economy under the current government is freedom to raise prices, such as fuel, electricity, and others.
Industrial Suicide and Long-Term Structural Losses
Al-Jamous described these decisions as “random,” explaining that the revenues the government will generate from raising energy prices will be many times lower than the losses the Syrian economy will later bear as a result of the measure’s negative repercussions.
The economic expert stressed that this increase will have a rapid and direct negative impact on citizens’ living standards, with citizens being the only ones harmed by its consequences. He said price chaos and arbitrary pricing by traders will accompany Syrians in the coming period, and that this began in the first hours after the decision was issued two days ago.
Al-Jamous warned that the government’s immediate profits from raising energy prices will be very small compared with long-term economic losses, which will appear in factory shutdowns, the exit of local producers from the market, and the loss of competitiveness against imported goods from neighboring countries, especially Turkey.
On May 7, the Syrian Petroleum Company raised fuel prices in Syria by between 17% and 30%, amid the sharp decline in Syrians’ purchasing power.
The price of a liter of first-grade diesel rose to $0.88, 117.05 new Syrian pounds, up from $0.75, an increase of about 17.3%.
The price of a liter of 90-octane gasoline rose to $1.10, 146.3 Syrian pounds, up from $0.85, about 29.4%, while a liter of 95-octane gasoline rose to $1.15, 152.95 Syrian pounds, up from $0.91, about 26.4%.
The price of a household gas cylinder rose to $12.5, 1,662.5 Syrian pounds, up from $10.5, about 19%, while the price of an industrial gas cylinder rose to $20, 2,660 Syrian pounds, up from $16.8, about 19%.
The bulletin set the dollar exchange rate at 133 new pounds, 13,300 old pounds.
Market Prices Could Rise by 60%
Economic expert Ammar Youssef told Enab Baladi that raising the prices of energy carriers has a major effect on the economy in general and on citizens and their living conditions in particular. He explained that although fuel price increases ranged between 17% and 30%, the price impact of this measure is represented by a 50% to 60% increase in prices in local markets.
Youssef said the new wave of price increases may make little practical difference to many Syrians, since the purchasing power of most people already does not allow them to buy goods at current prices. How, then, will the situation be with an additional increase and a living reality for citizens that has reached the lowest point, he said.
The expert added that the decision has a direct effect on transportation, and therefore on prices, because moving goods from one place to another plays a major role in pricing.
Calls for “Temporary” Support to Avoid “Disaster”
The economic expert said the Syrian government must support this sector out of consideration for the particular living reality and circumstances, considering it illogical to enter into fluctuations driven by global increases in a case like Syria’s, especially since the Strait of Hormuz will not remain closed forever.
Youssef advised the government to support and bear the burden of this cost temporarily until global and regional conditions ease, stressing that resorting to this option would be less harmful than raising fuel prices and facing their repercussions on the local market and Syrians’ lives.
The “Energy” Ministry Has Another View
A source in the Ministry of Energy said in press statements that “the state treasury incurred monthly losses exceeding $219 million during the past period in the file of subsidizing oil derivatives,” as he put it, “as part of its effort not to raise prices,” and that these adjustments were delayed as long as possible “to ease the burdens on citizens.”
Regarding the details of the losses, the source explained that diesel losses amount to $135 million per month, fuel oil $51 million, gasoline $23 million, and gas $10 million per month. He noted that “the decision to adjust prices guarantees citizens the continuation of supply and service provision,” and is linked to global oil prices and may change at any time.
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