Syria’s fuel crisis: The limits of reconstruction policy

On 17 September, the energy minister announced plans to offer cheaper diesel for specific uses, including heating, agriculture and industry. The standard price of 175 Syrian pounds per litre was to remain in place, with lower rates depending on the fuel’s specifications and intended use. According to the minister, the state was still selling standard diesel below cost. The concession to protesters therefore leaves the problem of funding supplies unresolved.

A 40 per cent rise in diesel prices triggered demonstrations and roadblocks, with protesters also halting tanker convoys. Reuters reported calls for government officials to be dismissed. The dispute over living costs took on a political dimension, while the blockades allowed protesters to disrupt transport directly.

The energy ministry attributed the price increases to higher procurement costs and maintenance at the Baniyas refinery. According to the authorities, the work is intended to improve the plant’s performance, but its temporary shutdown increases the need for refined fuel imports. The benefits of the overhaul lie ahead, while higher supply costs must be met immediately. Deferring the work would delay the anticipated improvement in domestic supplies, but proceeding without adequate support measures could weaken public support for reconstruction.

The price increases place an additional burden on an economy weakened by years of conflict. In February 2025, UNDP estimated that around 90 per cent of Syrians lived below the poverty line. More expensive diesel raises transport and agricultural costs, potentially increasing food prices and weakening local demand. Passing supply costs on to consumers may therefore slow business recovery and, in turn, the recovery of household incomes.

The crisis also has a regional dimension. Following disruption to shipping through the Strait of Hormuz, Iraq began exporting fuel oil via Baniyas. In June, Reuters reported on Syria’s transit revenues and on protesters blocking Iraqi road tankers. The cargoes were destined for re-export and were not processed at the local refinery. Handling this trade did not automatically increase the fuel available to Syrians, while protests could disrupt the regular flow of shipments.

Preferential prices can ease pressure if fuel actually reaches eligible recipients. Without sufficient supplies, the relief would remain largely on paper, and a dispute over prices could develop into a conflict over allocation rules. Reuters reported on 17 September that the cost and duration of the support remained unclear.

The immediate test will therefore be the availability of cheaper fuel, continuity of transport and the refinery’s return to operation. Improvements would reduce pressure for further price concessions. Deterioration could both increase supply costs and reduce transit revenues. The government will therefore also have to weigh the cost of support against potential losses from further transport disruption.