Syria gov't raises bread and diesel prices as crisis deepens

DAMASCUS — Steep bread and diesel price hikes went into force in government-held parts of war-torn Syria on Sunday, bringing more pain for civilians in a long-running economic crisis.

Damascus has repeatedly raised fuel prices in recent years to tackle a financial crunch sparked by the country's decade-long civil war and compounded by a spate of Western sanctions.

The price of diesel fuel nearly tripled and the price of bread doubled on Sunday, according to the official SANA news agency, only days after Damascus announced a 25 per cent increase in the price of petrol.

"This was all expected and now we fear further increases in the price of... food and medicine," Damascus resident Wael Hammoud, 41, told AFP while he waited for more than thirty minutes to hail a cab to take him to work.

The price hikes coincided with a decree issued by President Bashar Al Assad on Sunday that increases public sector salaries by 50 per cent and sets the minimum wage at 71,515 Syrian pounds per month ($28 at the official rate), up from 47,000 pounds ($18).

In a second decree, Assad raised public sector and military pensions by 40 per cent, according to SANA.

A price list published by the state news agency on Saturday night showed one litre of diesel fuel will now cost 500 pounds, up from the 180 pounds users in most sectors were paying previously.

Mustafa Haswiya, of the state-run Syrian Company for the Storage and Distribution of Petroleum Products, said 80 per cent of Syria's hydrocarbon needs are purchased from abroad using foreign currency.

“It was necessary to raise prices in order to reduce the import bill,” SANA quoted him as saying.

The price of subsidised bread doubled to 200 Syrian pounds. The state-run Syrian Foundation for Bakeries said that the rising price of diesel fuel contributed to the increase, according to SANA.

Diesel fuel in Syria is used to power vehicles and private generators that run for up to 20 hours per day in some areas to supplement an ailing power grid hampered by fuel shortages.

The pro-government Al Watan daily on Sunday said the diesel fuel hike will lead to “an increase in the price of transportation within and across provinces” by more than 26 per cent. The agriculture and industrial sectors will also see production costs rise, it noted.

The cost of heating homes will also climb by 178 per cent, according to Al Watan.

An economist in Damascus who spoke on the condition of anonymity said that the government will continue to raise prices as the crisis deepens.

“As long as there is no money entering the treasury, the price increases will continue,” he said.

The latest price hikes came nearly two weeks after the government in neighbouring crisis-hit Lebanon raised fuel prices by more than 35 per cent to combat shortages that authorities there blame in part on smuggling to Syria.

The provision of basic services and staple goods in Syria has been battered by the country’s civil war, which began in 2011 with government repression of protests.

In rebel-held northwestern Syria, neighbouring Turkey, a key backer of anti-government forces there, has sought to plug the gap, building flour mills and supplying power.