Syrians struggle to keep homes and businesses afloat as electricity bills triple and food prices soar

For months, the Syrian government has been gradually lifting subsidies on energy, from diesel and gasoline to gas and electricity, in an effort to reduce the budget deficit and boost treasury revenues.

However, these policy measures, introduced amid the continued decline in citizens' purchasing power, have triggered successive waves of price hikes in Syria.

The latest decision, which raised commercial and residential electricity tariffs, has led to a significant price increase across Syrian markets.

In a striking move, the Syrian Ministry of Energy issued new electricity tariffs at the end of last month, divided into four consumption brackets.

The first bracket — up to 300 kilowatts over two months — is priced at 600 Syrian Pounds (SP) per kilowatt, with a 60% government subsidy. That's about 0.55 USD

The second bracket, for subscribers with average incomes and small businesses, is set at 1,400 SP per kilowatt. (0.13 USD)

The third bracket, which includes government institutions, companies, and factories, is priced at 1,700 SP per kilowatt. In comparison, the tariff for energy-intensive factories is 1,800 SP per kilowatt (0.15-0.2 USD)

This adjustment represents a direct price increase for segments that, until recently, operated at subsidised rates, meaning the domestic and commercial sectors now face an additional burden on their bills and overall costs.

Munther al-Laham, owner of a carpentry workshop in the Damascus suburb of Qudsaya, told Al-Araby Al-Jadeed, The New Arab's Arabic sister edition, that his electricity bill had more than tripled in a single week, forcing him to raise the prices of wooden doors and windows by at least 25%.

"We have no choice... Electricity is the lifeblood of our business, and we can no longer afford it," he said.

In the markets of Damascus, Aleppo, and Homs, fruit and vegetable prices rose by 10% to 20% in just a few days, while dairy and meat products saw even larger increases due to higher refrigeration and transportation costs.

"Any increase in the price of electricity means an increase in the price of everything, from factory production to refrigerated goods," said Omar al-Tanawi, a food merchant in the Mazzeh neighbourhood.

Steep rises

During the week following the electricity tariff hike, Syrian markets saw price increases across staple foods.

The price of a kilogramme of tomatoes rose from around US $0.41 to US $0.50, while potato prices jumped from US $0.32 to US $0.44.

Meanwhile, the cost of a kilogramme of yoghurt increased from US $0.73 to US $0.86, and live chicken now costs US $2.55 per kilogramme.

Abdul Razzaq Khubza, secretary of the Consumer Protection Association in Damascus and its countryside, said the recent decision was made "without sufficient study of its impact on the markets."

He told Al-Araby Al-Jadeed that "raising electricity prices so abruptly will push traders and manufacturers to pass the entire bill on to consumers," noting that markets are already suffering from weak demand and shrinking purchasing power, meaning any increase in operating costs is immediately reflected in prices.

Khubza said that the association had urged the Ministry of Internal Trade to monitor markets more effectively, "but oversight tools are limited and can't keep up with thousands of shops and workshops amid this rapid rise in prices."

Economist Maen Issa believes that raising electricity tariffs in this manner will trigger a new wave of inflation that will be difficult to curb, particularly in the absence of compensatory wage policies or direct support for the most affected groups.

"Manufacturers are likely to reduce production or raise prices to offset the cost, which will deepen the recession and increase unemployment," he said.

Investment or burden?

Energy and economic advisor Ziad Arabish described the increase as "very high," explaining that the government did not adopt a gradual approach but instead used a "shock" method to bring the price closer to the actual cost of electricity production, which ranges between US $0.13 to US $0.16 per kilowatt.

Arabish believes that raising prices is necessary to stimulate development in the electricity sector and attract investment. Still, he stressed that the decision "places a heavy burden on families, particularly those with limited incomes," warning of a decline in living standards and a rise in poverty and economic hardship.

He explained that the rise in electricity prices will be reflected in the operating costs of factories and commercial establishments, leading to higher production costs and, consequently, a gradual increase in the prices of goods and services.

While the government insists that the move is necessary to improve the electricity sector and secure the funding required for maintenance and production, observers warn that the current measures could backfire, leading to a decline in production, an expansion of the black market, and greater reliance by Syrians on private generators that sell electricity at exorbitant prices.

Abdullah Al-Saad is an Iraqi freelance journalist, interested in political and economic affairs