Western Sanctions Cost Syria $2Bn Since September
US and EU sanctions on Syrian oil exports since the beginning of September 2011 have cost the county an estimated $2bn, Syrian Minister of Petroleum and Mineral Resources Sufian 'Alaw announced in a press conference on 20 January. The minister added that these sanctions, which ban dealings with Syrian oil companies, were “harsh and illegal.” They are intended to inflict maximum hardships on the Syrian people by preventing Syria from benefiting from the export of its resources so as to allow it to import petroleum products needed by the people. Mr 'Alaw added that as a result of sanctions the government had to turn to the treasury and Syrian banks to finance the country’s energy needs, whereas before these were financed from oil export revenue. The EU countries were previously importing about 130,000 b/d from Syria.
Mr 'Alaw went on to say that the EU ban on dealings with the state-owned General Petroleum Corporation (GPC) means that European companies partnering GPC in joint ventures had to stop their activities in exploration, development and production in the country. The ban has also prevented the conclusion of new investment deals and created major problems in financial dealings, after the introduction of sanctions against the Commercial Bank of Syria. Coupled with the stiff sanctions, the minister noted that the oil and gas sector was attacked by saboteurs and armed groups on several occasions, causing damage to pipelines, installations and other facilities estimated at around S£2bn ($35mn).
But the minister said Syria was looking for alternative markets for its crude oil exports to replace the European importers. He admitted however that there were serious obstacles with regard to providing trade finance and shipping insurance coverage because of the sanctions. At present he revealed that six companies from China, Russia, Croatia, and Egypt were still active in Syria.
Syria Raises LPG Price By 60%
The Syrian government has raised the price of an LPG cylinder (household gas) by 60% to S£400 ($6.90) from S£250 ($4.31). Syria is experiencing a shortage of various petroleum products with the continuing political upheaval in the country. LPG is subsidized in Syria and its cost of production is more than double the sale price. Last month the price of 95 Octane gasoline was raised by 10% to S£55 ($0.95)/liter and that of regular gasoline by 13.6% to S£50 ($0.86)/liter (MEES, 2/9 January). The government had previously planned to phase out all subsidies on energy over a five-year period, but this plan had to be abandoned as a result of the ongoing political turmoil in the country.
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