Turbulent Economy in Syria Due to Civil War

The effect of the 3 ½ year civil war in Syria is rippling through its economy with many in business worried about not being able to pay for increased costs, which will push them out of business.

Earlier in October, the Syrian government increased the price of subsidized diesel to 48 cents per liter just prior to a big Islamic holiday. The increase pushed heating oil to 85 cents from 73 cents per liter.

The price increases are linked to the bombing the United States is carrying out in eastern Syria of pumping stations, tankers and wells that are under Islamic State control.

The militants were selling the oil at inexpensive prices, including $1 billion to the government of Syria, with the proceeds one of the biggest sources of income for the radical militant group.

Syria’s oil reserves are modest. Prior to the war the country was producing 360,000 barrels daily, since the fighting started it is pumping just 16,000 per day.

The country therefore has become reliant on importing oil and militants selling its own resources back to them.

The effects of the most recent price hike in fuel have impacted the prices of milk, yogurt and bread. The price of one loaf of bread that is unsubsidized increased from 85 cents to 97 cents, which is four times more than the pre-crisis price of 21 cents.

Milk went up from $1 to $1.13. Prior to the crisis, milk cost 30 cents.

Other goods are likely to feel the impact and increase over the next couple of weeks, said some traders at a Damascus bazaar called Hamidiyeh Souk.

The market was once a vibrant commerce center with locals, visitors and tourists shopping for everything from sweets to antiques to lingerie. Today it remains an important shopping location for the working class in the country.

For most of the products in the market, the price has at least quadrupled since the conflict started.

A print leisure suit was $6 before the war and is now $21. The price would appear inexpensive by standards in the west, but salaries are much lower in Syria: most soldiers and civil servants received a monthly salary of about $100.

One economic expert in Syria said the al-Assad government was attempting to stave off additional losses through appealing to Russia for its fuel supplies and its wheat.

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