Syrian Economy is Hitting Rock Bottom

Syrian Economy is Hitting Rock Bottom

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After 11 years plus of civil war and free money from Russia and Iran, both of which rely on oil prices for their own economies, signs that the Syrian economy is hitting rock bottom are becoming too clear.

Syria’s oil and mineral resources ministry announced Saturday a reduction in automobile fuel subsidies. It is the most serious measure the Assad regime has embraced to tackle a faltering economic. One that is on the brink of collapse.

The ministry said it was revising down its fuel subsidies, excluding from its ration system users of cars with engines of 2,000 cubic centimeters or more, as well as owners of more than one car.

Subsidized fuel is distributed through a smart card system, whereby smaller cars receive up to 100 liters (26 gallons) of fuel a month at 250 Syrian pounds a liter (36 cents per 0.25 gallons.)

Non-subsidized fuel goes for nearly double the price at 450 Syrian pounds a liter (64 cents per 0.25 gallons.)

The Assad regime introduced the smart card distribution and limit on subsidized fuel last year. In the middle of an increasing fuel shortage.

The economy of the war-ravaged country saw the local currency plummet before the dollar late last year. That sent prices of basic goods soaring and was soon followed by restrictions imposed to prevent the spread of the coronavirus that limited movement and trade.

INFLATION SOARS

The price of vegetables and eggs went up by as much as 75% in March and the government included subsidized bread under the smart card system. It also banned the export of some commodities, including eggs and dairy, to contain the price rise.

The Syria Report, which follows the local economy, reported last month a drop in the consumption of oil by about 50% because of coronavirus movement restrictions. This is a decline that is likely to have hurt government revenues.

The government produces some of its fuel for domestic needs. The rest it buys from Iran using a credit line, that it sells for a profit on the market.

The regime is lifting restrictions on movement gradually. Public transportation resumes operating within provinces starting Sunday.

Syrian Economy is Hitting Rock Bottom

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