With ISIL’s oil targets hit, Syrians reel from soaring fuel prices

Oil prices are soaring in Syria as US-led airstrikes target the country’s modest oil reserves under the ISIL’s control, sending ordinary Syrians reeling as the knock-on effects on the economy continue to take a toll on daily expenses.

DAMASCUS // Spiralling oil prices have started to hurt ordinary Syrians, who were already struggling as the civil war entered its fourth year.

The US-led bombings of ISIL have been targeting small oil wells, tankers and pumping stations under the militants’ control in the eastern provinces of Deir Ezzour and Hassakeh, sending oil and diesel prices soaring.

Earlier this month, the government raised the subsidised price of diesel from 36 cents to 48 cents a litre. The price of heating oil went from 73 cents a litre to 85 cents.

The effect is rippling through the economy. Traders fear they will not be able to absorb the increased costs, pushing them out of business and unravelling yet another key sector of Syrian society already badly crippled by the conflict.

“We are hearing there’s unimaginable prices for the winter,” said the 50-year-old vendor, who gave his name as Amin. “We have been through struggles before, but not like this.”

The militants had been selling the fuel at a cut-rate price – including some US$1 billion (Dh3.67bn) to the Syrian government – and the proceeds amounted to one of the group’s main sources of income, according to a Mideast-based Western diplomat.

Syria has modest oil reserves. Before the conflict it was pumping 360,000 barrels a day.

Since the fighting it has only managed 16,000 barrels per day, said Syria economy expert Abdul Qader Azouz. That has made it reliant on exports and militants selling back the country’s resources.

The knock-on effects of the latest fuel price hike and continued bombings have already impacted the price of bread, yogurt and milk.

The price of a loaf of unsubsidised bread rose to 97 cents from 85 cents – more than four times the 21-cent price tag before the crisis. Milk rose to $1.13 from $1. Before the crisis it was 30 cents.

The prices of other goods are likely to rise in the next few weeks, said traders at the Hamidiyeh Souk, who are an important measure of the economy’s pulse.

Prices have already quadrupled over the past four years for most products in the market.

Mr Azouz said the government was appealing to Russia for fuel supplies and wheat. It was also asking Iran for guarantor credit lines of $3bn for oil products and another $1bn for other expenses, he said.

Mr Azouz said resources were being diverted to ensure Syrian soldiers had first access to fuel and food, and to cover payments for the families of soldiers killed in the fighting.

The Syrian government has come under fire from its own loyalists for the staggering number of soldiers killed during the conflict that erupted in 2011 against the rule of President Bashar Assad.

The central bank has also intervened to ensure the Syrian pound does not collapse, a policy Mr Azouz said would continue.

Most of Syria’s impoverished have already hit rock bottom. One 20-year-old vendor, Mohammed, who sells vegetables to try to cover his family’s $90 monthly rent, said his family was relying on food aid donated by the social ministry.

“It’s beans, sugar and oil,” he said. “We are as you see us,” he added, pointing to his shabby pants and jacket.

A handbag trader said he was not sure how much longer he could hold on if prices continued to rise.

“The first year, the second year, those who had good work before the crisis and whose situation was middle class or better – they had a bit of money,” said Firas. But now, traders were running out of cash to cover their continuous loses.

“The trader who could hold on for two or three years – I don’t think he can survive for five years,” he said.

* Associated Press