Syria raises gasoline price by 20% to relieve subsidy burden

Syria has raised the price of gasoline by 20 percent as part of government-guided austerity measures to cut costly subsidies, the fifth increase in three years. The Ministry of Trade and Consumer Protection issued Wednesday a decision to raise the price of one liter of gasoline from 100 to 120 Syrian pounds (0.73 U.S dollars), noting that the decision will come into effect as of Wednesday. Syrian Oil Minister Suleiman al-Abbas told the local al-Watan newspaper that gasoline is still subsidized by the government and the hike will have no impact on a wide section of citizens. The minister said that the subsidy of one liter of gasoline costs the state's treasury 124 pounds, noting that subsidy overburdens the treasury especially with the continuous change of the exchange rate. The pound was traded at 46 per dollar ahead of the crisis in 2011 and has now reached 174 pounds in the black market. Meanwhile, al-Abbas said that the new measure will help alleviate the increasing burdens of the subsidy, whose figures have reached unprecedented levels, adding that the measure has been taken by the government in compliance with the public interest. Al-Abbas indicated that all quantities of oil derivatives currently being used in Syria are imported via the Iranian line of credit, adding that the Syrian domestic production does not exceed 12 thousand barrels per day, down from around 380,000 barrels a day shortly prior to the crisis. He stressed that the government has continued, after more than three years of war, its subsidy of oil derivatives, ruling out the possibility of raising the cooking gas and diesel prices, which is used by most Syrians in heating. Ahead of the crisis, the price of a liter of gasoline was 40 pounds, and it witnessed several hikes, the last of which was last October when it reached 100 pounds. Syrians are suffering from a lack of fuel and this has triggered off a sharp rise in their prices on the black market and prompted the government to import oil form friendly countries, mainly Iran. Oil sector was a pillar of Syria's economy until the outbreak of events, with the country producing about 380,000 barrels and exporting around 130,000 barrels a day and put the rest in domestic use. Oil is at risk as the main oil fields are located in rebel- held areas in northeast of Syria and is erroneously used by gunmen. At the beginning of the crisis, the EU has slapped Syria with harsh economic sanctions including an embargo on purchasing or transporting Syrian oil and prohibiting companies from dealing with Syria or investing in it, in addition to withdrawing experts and staff, suspending funding, and imposing sanctions on Syrian petroleum companies. By the end of 2011, all foreign companies that were operating in the oil field left the country.