People in northern Syrian live under threat of rising prices
Enab Baladi – Ali Darwish
“Prices are different from store to store,” complained Ibrahim al-Muhammad. Ibrahim al-Muhammad, a displaced young man from Idlib’s southern countryside, sheds light on high prices and price dispersion, which occurs every other day, in the opposition-held areas in northern Syria. He added that citizens could not understand the mechanism of buying and selling, with three currencies involved in pricing the materials in the area.
Al-Muhammad told Enab Baladi that when shop owners want to raise certain products’ prices, they use the Turkish Lira (TL) even though Turkish Lira is equivalent to 300 Syrian Pounds (SYP).
Al-Muhammad used to spend 100 US dollars to meet his needs for ten to 15 days before the Syrian pound was replaced with the Turkish lira, but now it is barely enough for that period, saying that “the Turkish lira flies fast like gasoline.”
For example, a week ago, the gas cylinder was 65 Turkish liras, while now it costs 70 Turkish liras, meaning its price rose 1,500 Syrian pounds.
The Syrian pound recorded an exchange rate of 305 against the Turkish lira for sale, and 300 for purchase, while the value of the Syrian pound against the US dollar reached 2,420 per US dollar for sale and 2,390 for purchase, according to the Syrian Pound Today (a Syrian Pound tracking website).
The Salvation Government (SG), which governs Idlib governorate and part of the countryside of Aleppo, and the Syrian Interim Government (SIG), which controls the rest of the opposition-controlled areas in the countryside of Aleppo, decided to replace the Syrian pound with the Turkish lira last June after the markets in northern Syria saw daily fluctuations in the commodity prices, with the value of the Syrian pound falling sharply. The pound is trading at 3,000 pounds to the US dollar.
A report published by REACH Initiative showed the percentage increase of prices in the opposition-controlled areas in northwestern Syria. REACH conducted Market Monitoring Exercises in northern Syria between March and September (during the last six months) to assess the availability and prices of essential commodities typically sold in markets and consumed by average Syrian families, including food and non-food items, water, fuel, and cellphone data. The organization depended on the Syrian pound in making the comparative study. It showed that small and medium-sized companies’ costs increased by 97 percent and by 100 percent to small and medium-sized enterprises specialized in food items.
Gas prices increased by 126 percent, water tanker trucks’ prices rose by 80 percent, while cellphones by 60 percent, fuel (petrol and car diesel) by 65 percent, and hygiene items by 101 percent. In addition, there was an increase in the prices of winter supplies.
Exchange rate variation is a problem at all levels
Muhammad al-Darwish, the owner of a food store in Idlib, told Enab Baladi that small shop owners are also suffering from the varied prices of currencies, whether TL or SYP, against the US dollar, which caused price instability.
Most of the goods in the opposition areas’ markets are imported, and the merchants pay the price of the goods in US dollars. Their price is set in TL, except for some locally produced items such as vegetables, whose prices have also been affected by other reasons, as monitored by the correspondent of Enab Baladi through several meetings with merchants.
Speaking with Enab Baladi, Abu Mahmoud, a fuel vendor in Dana, north of Idlib, said that he earns a profit, at best, of 30 Turkish Kurush for every liter of fuel he sells (petrol and diesel).
However, he is being held accountable by the people because of the high fuel prices, which he attributed to the fuel suppliers in opposition-controlled areas.
Market prices determined by demand and supply… Subsidies on certain products
Abdul Hakim al-Masri, minister of finance and economy of the SIG, said in his speech to Enab Baladi that the government maintained customs rates after the SYP was replaced with TL in Syria since a large part of the consumer goods and items are imported in US dollars to the opposition-held areas.
Prices are subject to supply and demand. Prices of consumer goods are not usually set by the government, except for state-subsidized items. The SIG grants bread subsidy; bread is sold in the SIG-held area at a subsidized price of one TL in the local councils’ bakeries since bread is locally made.
Merchants can import materials, whose prices are subject to supply and demand. Besides, the SIG prohibits monopolies and other restraints for achieving fair competition among merchants, according to al-Masri.
He indicated that some merchants are driving the prices up to some extent due to the SYP and TL exchange rate volatility. They also try to raise the prices before depreciation in the currency takes place.
According to al-Masri, the procedures taken by the government or the local councils are limited to controlling prices, allowing merchants to import materials into the country, and imposing customs duties over products. Al-Masri added a reduction in customs duties on some basic materials, which do not cause rising prices. Al-Masri said the government also continues to provide bread at a subsidized price.
He added that the fuel taxes are simple. There is a proposal to reduce or eliminate them, pointing out that the SIG has nothing to do with the oil coming from the areas controlled by the Syrian Democratic Forces (SDF) and does not impose fuel taxes because the SIG does not have control over the crossing in which fuel is transported through.
Effect of fuel and land loss on domestic products
High prices were not limited to imported products but also included locally produced materials, particularly vegetables.
Minister Abdul Hakim al-Masri justified the increases in prices by losing large parts of agricultural areas in the southern Hama countryside, the eastern and southern countryside of Idlib and western Aleppo, as a result of the Syrian regime’s control over them, through successive military campaigns from April 2019 until 5 March 2020.
According to al-Masri, agricultural production decreased in the opposition-controlled areas with the loss of these agricultural lands, causing soaring prices, regardless of whether the exchange rate is high or low.
The Syrian regime has made progress in regaining control of areas since April 2019, amid the opposition’s losses of agricultural lands; this posed a threat to food security in the opposition-controlled areas in northwest Syria, with the loss of about 2,300 square kilometers of agricultural lands, while only 1,500 square kilometers remained under the control of the opposition factions, meaning, the Syrian opposition factions have lost 60 percent of their agricultural lands.
According to the statistics provided by the “Nors Center for Studies” in north-western Syria, the above-mentioned figures regarding the agricultural lands are part of an area that the Syrian regime made progress in, which is estimated at around 3,140 km2 since 27 August 2019.
Northern and north-western regions—including areas in the northern countryside of Hama, Idlib (aka the green province) Aleppo countryside, in Syria, are known as an agricultural area par excellence. Therefore, people there depend primarily on agrarian lands to get their economic resources, then on small agricultural industries, Khalid Turkawi, an economic researcher, told Enab Baladi in a previous interview.
Fuel price has risen six times since last July
The fuel price has increased six times since it was priced in TL last June by the Watad Petroleum Company, which controls most of the fuel sector’s market share in Idlib and part of the western countryside of Aleppo.
Its prices have also increased in the opposition-held Aleppo countryside. The increase in fuel prices affects various other sectors, especially agriculture, as the increase in fuel prices has led to increased transportation fees and irrigation water costs, as confirmed by farmer Muhammad Salem Khadro to Enab Baladi.
Fuel is also used in industrial facilities in the opposition areas, which led to a rise in the prices of everything related to these facilities’ production.
Agriculture is the main resource in northern Syria and the transportation sector in border areas such as Idlib and Aleppo. In other words, there are economic sectors based on agriculture, as refrigerators for storing foodstuffs (especially agricultural products) and cars transporting goods through the crossings, according to researcher Khalid Turkawi.
Repeated justification for high fuel prices despite controls
Oil prices in the opposition-held areas are affected by world oil prices. Oil and petroleum products are imported from Turkey via one company that supplies the whole region.
The recent increase in the price of the gas cylinder resulted from the gas supplier company raising the price of the cylinder, according to the media office of Watad Petroleum Company.
The public relations official at the SG’s ministry of economy and resources, Muhammad Zakaria Daaboul, said in an email to Enab Baladi that the pricing of fuel is carried out under the supervision of the ministry of the economy through companies licensed in this field. All costs are taken into account in the supply chain of oil derivatives.
Based on any increase or relative decrease in the US dollar exchange rate against the Turkish lira, the ministry will adjust the fuel prices. Furthermore, if the oil supplier company increases or decreases the prices of fuel imported from European countries through Turkey, this will consequently lead to an increase or decrease in the fuel prices in Idlib.
As for “the refined” diesel coming from the areas controlled by the “SDF” in northeastern Syria, its price is subject to market fluctuations in the “SDF” regions and the change in the price of European oil products, according to Muhammad Daaboul.
Enab Baladi monitored the price bulletins of petroleum companies and petrol stations in the opposition-held areas and observed that the fuel prices have not been reduced since last June.
The supply directorate controls the petroleum companies in the SG’s areas of influence at the economy’s ministry. Besides, the ministry of economy appointed some specialized committees to coordinate with Watad Petroleum Company and oversee its work. Furthermore, some committees monitor and review the company with each price hike and discuss the new fuel prices by conducting calculations, according to Watad Petroleum Company’s media office.
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