Syria new electricity tariffs are cruel neoliberal shock therapy

Following last October’s announcement from the Syrian government that there’d be a rise in electricity prices, the recent implementation of the new tariffs has left many feeling frustrated and angry. Some are even organising protests over the increasingly unaffordable cost of living.

This is part of the continued austerity measures being imposed by the new ruling authorities which have led to an increase in the price of key commodities such as bread and oil.

The rise in electricity prices is in fact the largest in the country's modern history. The tariffs increased from an average of 10,000-50,000 Syrian pounds (around $0.85 – $4), to bills ranging from 600,000 to over 2 million pounds ($50-$169). Some families even saw their bills reach between 5-6 million pounds ($423-$508).

The new tariffs have also dealt a major blow to key sectors, particularly the manufacturing industry and agriculture, that were already facing raising production costs.

In the face of this unbearable economic situation, a demonstration was organised under the slogan ‘electricity is a right not a luxury’ in front the ministry of energy in Damascus. and another has been called in Homs this weekend. Additionally, more and more people are claiming that they won’t pay their bills and will find other ways to procure electricity.

Increasing poverty

The increased electricity costs worsen an already dire reality for the majority of the population who aren’t able to cover their monthly needs with just their (state or private) salaries. More than 90% of the population live under the poverty line, while nearly 17 million people require urgent assistance to survive, and more than nine million face acute food insecurity.

The massive rise in prices will also result in new and deepening inflation rates, pushing the cost of living even higher.

Although the authorities raised public-sector salaries and pensions by 200% in July 2025—bringing the minimum wage to 750,000 pounds per month (around $63)— the average cost of living for a family of five in Damascus was estimated at around 11.6 million pounds ($983).

Large segments of society survive and rely on remittances from relatives abroad, which is currently estimated to be over $4 billion annually.

Government officials have justified this decision with the significantly improved provision of electricity across most of the country – though in some rural and marginalised regions of the country it continues to fluctuate. Furthermore, in line with the IMF and World Bank rhetoric, officials are saying that the rise serves to correct price distortions and ensure service continuity as the electricity sector drains around one billion dollars annually in the state budget.

People are now also fearing that electricity prices will continue to increase with the liberalisation of the sector. These worries are intensified by the fact that the government has finalised an agreement with a group of foreign companies, led by Qatar’s UCC Holding, to construct eight gas and solar power generation plants across Syria, for a total value of $7 billion.

The hiking up of prices therefore benefits these large foreign companies in the process of increased privatisation.

Oil and gas

Alongside the major foreign investments in the country, which reportedly exceed $56 billion, the government is claiming that their control over natural resources (namely gas and oil) in the Jazira region will lead to the country’s economic redevelopment.

Indeed, a significant portion of the country’s oil (90%) and gas (45%) reserves are found in the northeast – which was under SDF control until the government’s recent military offensive.

However, Syria will continue to be dependent on imported oil and gas to cover its full national consumption in the short to medium term. It will hardly be able to export oil for the foreseeable future. Total oil production could rise in the following months to 100,000 barrels per day, while domestic demand was estimated at 163,000 b/d in 2024.

One of the reasons for this, is that over the past decade the oil and gas sectors were considerably damaged during the war, particularly in Jazira. This hampered production capacities, leaving   pipelines and refineries in desperate need of restoration. For example, the country’s two main refineries,  Banias and Homs, have a combined capacity of about 240,000 b/d but are only supplying respectively 80% and 30-40% that quantity.

As far as reconstruction goes, the price for the oil sector alone is estimated at approximately $10 billion. Not to mention, this would also be dependent on political stability and security.

The attempts by the government to revive former agreements and attract new investors in order to increase national production and improve oil and gas infrastructures, will therefore take years.

This reality raises doubts about President al-Sharaa’s recent claim during a media interview that Syria had a production of approximately 400,000-600,000 b/d, and that with modern equipment, as well as foreign investments, oil production could exceed approximately one million b/d, generating revenues of $20 billions…

Not only are these statements incorrect, but they also show a weakness in the government’s strategy to foster economic recovery and develop national production.

In reality, the government’s choices have only worsened the conditions for the redevelopment of a sustainable economy and of the productive sector following the suppression of subsidies on key commodities and services, and rising competition of foreign products in the national market. For instance, Turkish exports to Syria recorded significant growth in 2025.

At the same time, Damascus encouraging Foreign Direct Investments in non-productive sectors of the economy such as real estate, finance, tourism, and trade has also fed into the current context.

What the government should be doing, is focusing its energy on trying to develop the country’s productive forces, particularly in agriculture and manufacturing industry, and create the conditions for an increase in the purchasing power of the Syrian popular classes.

Furthermore, the government must address the lack of transparency when it comes to its economic policies given the questions being raised over how the benefits from oil revenues will be distributed, especially following the establishment of the Syrian Petroleum Company which merged all state-owned oil institutions into a single entity under (mostly) presidential control. In particular, the role of Mohammad Omar Qadid, a key figure in al-Sharaa’s Hayat Tahrir Sham, has caused a stir as he is reportedly planning to acquire the management of all gas stations affiliated with Mahrukat, a state-owned entity responsible for the transport, storage, and distribution of locally produced and imported petroleum derivatives.

Ultimately, economic recovery requires a comprehensive and inclusive strategy, which is certainly not the ruling authorities’ current approach as the majority of the population continues to suffer.

Joseph Daher is an academic and author of Syria after the Uprisings, The Political Economy of State Resilience ; Hezbollah: the Political Economy of Lebanon’s Party of God; Marxism and Palestine.

Follow him on Twitter: @JosephDaher19

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Opinions expressed in this article remain those of the author and do not necessarily represent those of The New Arab, its editorial board or staff.