Syria winter is a “nightmare” although oil tanks are full

Baniyas Refinery - 11 October 2020 (Baniyas Refinery Company)

Baniyas Refinery - 11 October 2020 (Baniyas Refinery Company)

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Enab Baladi – Muhammed Fansa

“The advent of winter is a nightmare for the residents of the western countryside of Daraa,” said the 30-year-old Ne’ma, who registered for the government-subsidized heating fuel allocations, even though “It will not be enough for one month,” she expressed her concern about facing the coming winter’s cold.

Ne’ma, who preferred not to use her full name for security reasons, explained that she was quick, like most residents, to register for the 50 liters of heating fuel, although it is not enough for one month’s heating, as the family needs three liters as a minimum per day.

The price of one liter of diesel reached 7,000 SYP on the black market, and had the Syrian Company for Storage and Distribution of Petroleum Products (Mahrukat) delivered the entire allocated quantities (200 liters), it would have reduced the residents’ needs by half. However, citizens only received 50 liters in 2021, according to Ne’ma.

The Syrian Ministry of Oil and Mineral Resources announced the start of registration for heating fuel for the next winter, starting from 14 September, as registration will start on a quantity of 50 liters as an “initial allocation” only, without announcing the amount of batches allocated for the next winter season.

The statement added that the priority for delivery after registration will be according to the “oldest purchase” of heating fuel.

Frequent Iranian tankers… What is their impact?

Over the past 40 days, Enab Baladi monitored the Syrian port of Baniyas receiving more than 4.5 million barrels of crude oil, in addition to 4,000 tons of natural gas, and 36,000 tons of diesel, via Iranian oil tankers within the Iranian credit line, while the regime-controlled areas need about 6 million barrels per month, according to previous officials’ statements.

The recent visit of the head of the Syrian regime, Bashar al-Assad, on 8 May, to Tehran activated the credit line in its new version, and after the visit, the successive arrival of Iranian oil tankers began, in light of the stifling fuel crisis experienced by the regime areas.

On 25 September, the General Manager of Baniyas Refinery, Mahmoud Qassem, stated that he had started raising the amount of fuel supplied daily to the power plants because the operation and production process continued inside the refinery without interruption in the recent period.

“We no longer have tanks to put the crude oil inside the refinery because it is full, so the arrival of the tankers did not change anything in the production process because the refinery never stopped working,” Qassem added.

Mohammad al-Fateeh, an economic and political analyst in Middle East affairs, told Enab Baladi that the Syrian oil and energy file is one of the most “complex” issues, and what happens in a month, in terms of supplies or consumption, cannot be relied upon.

Last September witnessed the transfer of a relatively large amount of Iranian crude oil, there have been several months in recent years in which Iranian imports have stopped completely, and there have been leaks about the possible reasons for stopping imports and, in return, semi-official accounts have come out regarding the disruption of Iranian imports by Egypt’s decision to prevent the passage of Iranian tankers through Suez Canal.

In April 2021, the regime’s Prime Minister, Hussein Arnous, said the government was working monthly to secure 3.5 million barrels through imports, but due to the suspension of navigation in the Suez Canal, supplies were delayed, forcing it to organize stock distributions by 25%. 

Al-Fateeh believes that Iran’s transfer of additional oil shipments cannot be separated from the rest of the developments in the region, such as the decline of Russian involvement in Syrian affairs in the interest of the Iranian presence.

“The Iranian nuclear negotiations reached a ‘deadlock,’ which enhances the possibilities of escalation in the region. The oil supply file is in the same context as the transfer of Iranian weapons through the Middle East,” he added.

Moayad al-Bunni, a political and economic analyst at the COAR Global Research Center, agreed with al-Fateeh, that the oil shipments that arrived recently from Iran will not lead to any qualitative improvement in the provision of fuels in the markets, and any breakthrough will be temporary, and its impact on reducing the price of the substance in the market will be “limited,” he told Enab Baladi.

Allocations do not cover public or private sectors

The industrialists in northern Aleppo city complained about the unavailability and distribution of fuel for the industrial facilities that have been using it in their work for more than six weeks.

This portends “disastrous” consequences for hundreds of facilities, some of which have stopped, and others are threatened to stop at any moment, according to what was published by the local Syrian Industry News website on 18 September.

On 26 September, the pro-regime al-Watan newspaper published a report on the continuation of the transportation crisis in Damascus, despite official promises to improve the situation after the middle of the same month, relying on obligating public transport buses and mini-buses to install GPS devices to force them to work within their areas.

Owners of mini-buses resort to working independently, not through the lines specified for them by the government, as a result of the insufficient subsidized allocations for diesel at the price of 500 SYP and their having to buy it at the free price of 7,000 SYP, which makes it impossible for them to obtain wages equivalent to costs.

In response to the industrialists, the Oil Minister, Bassam Tohme, said on 20 September that the production of fuel from the Homs and Baniyas refineries is linked to the quantities of refined crude oil in both refineries.

The reason for the interruption of the material was that the Baniyas Refinery stopped production as a result of the lack of crude oil from 28 August to 6 September, and the Homs Refinery is operating at the minimum level, according to Tohme.

He explained that last August, about 11,000 tons of fuel were distributed to the private sector, from which 237 companies benefited, and about 190,000 tons of fuel were delivered to the electricity sector, while about 17,000 tons of fuel were distributed to the public sector.

What is the regime’s ability to secure oil?

Arnous stated on 26 September during the People’s Assembly session that since the beginning of this year, three gas wells were introduced to the service, bringing the daily production rate to 11.2 million cubic meters of natural gas, and a number of oil wells were repaired so that the daily production rate would be about 19,000 barrels.

The regime prime minister confirmed the import of 16 million barrels of crude oil since the beginning of the current year, without specifying the source, while talking about the difficulty of securing these quantities as a result of “sanctions and the siege imposed on Syria.”

Energy expert Mohammad al-Fateeh considered that the experience of past years does not encourage optimism that the arrival of a large oil shipment means the permanent transition to higher supply levels, especially since Iranian oil is within the Iranian credit line program, which is not official information about its current value, and the value of accumulated benefits and possible payment methods.

He explained that the Syrian regime cannot rely on the oil coming from the areas controlled by the US-backed Syrian Democratic Forces (SDF) through businessmen affiliated with it, citing that oil production in the areas controlled by the SDF has decreased, which prompted the latter to start procedures to ration quantities of fuel, through the “Smart Card” application, last September, in northeastern Syria.

Al-Fateeh pointed out that the role of the SDF-controlled areas will decline significantly during the next year or two in securing oil derivatives for the Syrian regime, which may push the latter to smuggle oil derivatives from Lebanon with “higher bills,” and not from Jordan, which tightened security on its borders, and thus the prices of smuggled derivatives to Syria will likely be double the international rates.

For his part, analyst Moayad al-Bunni said that the regime government suffers from a clear lack of technical capabilities, including the issue of refining crude oil and distributing it to the governorates in a manner that matches their needs, and ensuring that subsidized oil derivatives reach consumers within the promised period.

What are the alternatives to face the winter?

Citizens are looking for alternative solutions for heating during the winter, such as olive waste, firewood, waste, and plastic materials in some cases, especially with the government’s subsidized diesel allocations being barely enough for one family for one month (50 liters), in addition to the high prices on the black market.

With the approach of the winter season, the Syrian Petroleum Storage and Distribution Company (SADCOB), or “Mahrukat,” announces the amount of allocations per family for heating fuel every year.

However, citizens residing in regime-controlled areas have complained during the past years that they only received the first batch, while many of them did not receive diesel at a subsidized price, according to what Enab Baladi monitored, and Oil Minister Bassam Tohme previously referred to it, saying, “Do we give all Syrian families 50 liters, or do we give half of the families 100 liters?”

Al-Fateeh believes that the options Syrians can resort to have become “very limited.” Forests and woodlands have shrunk dramatically in recent years, and some types of fuel produced from the remnants of agricultural production are not very competitive with oil derivatives.

He also pointed out that the production of these materials is limited, and the transportation cost is high due to the high prices of oil derivatives, in addition to the fact that the use of most of these new sources requires moving to the use of special heaters, which will raise the cost for the residents.

Al-Bunni said that the prices of oil derivatives on the black market are currently almost higher than those in neighboring countries, especially when compared with the quality of the product, which will make it difficult for most of the residents, among whom the poverty rate has reached about 90%, to secure their needs of heating fuel for this winter, or even firewood, the price of which had already risen during last winter.

In 2021, the regime’s government allocated 200 liters of heating fuel to each family with a “smart (subsidy) card,” to be distributed in four batches during the winter season, but according to government statements, the second batch was distributed last March to only about 30% of the residents.

On the 23rd of last March, the Oil Minister justified the delay in distributing the second batch of heating fuel by decreasing the quantities of refined oil in the Homs Refinery, placing the responsibility of distributing petroleum products in the provinces on the governors.

 

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