As part of consecutive increases in prices for energy and oil derivatives, the government has raised the price of fuel. While supporters of the decision argue that subsidies still exist, given that they are calculated against government losses, this argument ignores the reality that a crisis situation requires different economic calculations and priorities. In this setting, the concepts of government subsidies and losses vary in definition. If raising fuel prices helps to mitigate government losses, it also pushes losses onto the industry sector in Syria through the series of price hikes; yet industrialists and economists, showing limited vision, have seemingly agreed to this arrangement.
Majd Shashman, a member of the Board of Directors of the Aleppo Chamber of Industry, assured Al-Watan that high fuel prices will place industrialists at many disadvantages. These include the weak competitiveness of Syrian products in foreign markets and harmful impacts on Syrian consumers.
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Shashman said that non-participatory decision-making with the industrial sector is a problem in itself. This exclusionary approach will harm industrialists who execute foreign contracts, and even those who operate locally.
He said, [for example], that industrialists did not know about the increase in the price of beans before reading the news on social media.
On the decision to raise fuel prices, economist Ammar Youssef told Al-Watan: “On the government’s decision to raise fuel prices, it is true that the decision does not have a clear impact on all industries. Yet the problem is that the adjusted prices place larger profits in the pockets of traders and industrialists. A 10% fuel price increase, for example, can lead to a 50% price increase for goods, as industry stakeholders use rising fuel costs to justify increasing prices—even if their industry does not depend on fuel. Indeed, fuel prices have been factored into the high prices of many goods, including but not limited to tissue paper. We do not know what these raised costs have to do with higher fuel costs, given that the price today reached 4,000 Syrian pounds.
Youssef stressed that the government’s problem lies in raising the prices for fuel products, which directly and indirectly affect the average citizen’s living standards. Accordingly, the price hike further devalues the Syrian pound, which leads to “citizen starvation.” Therefore it is necessary to break this vicious cycle. Youssef explained that the government—whenever it needs money to finance the budget deficit—reaches into the pocket of households by raising prices. He indicated that the citizen no longer has the stamina for this cycle, pointing out that the problem comes back to the government—not global price increases.
This article was translated and edited by The Syrian Observer. The Syrian Observer has not verified the content of this story. Responsibility for the information and views set out in this article lies entirely with the author.