Oil Report

Syria slashes gas oil subsidy, tripling price

DAMASCUS (Reuters) - The Syrian government more than tripled the price of gas oil on Saturday, kicking off a program to remove big subsidies on the fuel.

Pump owners said a liter of gas oil went up to the equivalent of 54 U.S. cents from 15 cents. The state imports large volumes of the fuel at around $1 liter.

An official in the ruling Baath party told Reuters last month that preparations were under way for the gradual removal of gas oil subsidies, which cost the treasury $9 billion a year.

Gas oil is used in Syria on a large scale for industry, transport and heating.

The gas oil price increase came as the government announced a 25 percent hike in public sector salaries to help the population absorb rising living costs and the impact of subsidy cuts.

The increase, which will take effect this month, covers 2 million public workers and retirees, the state news agency said. Syria has a population of 18 million.

The government has taken limited steps to liberalize the economy and lower subsidies in recent years to counter U.S.-led efforts to isolate Syria and the impact of falling production of crude oil, the main source of hard currency.

Petrol prices went up sharply in the last two years to 87 U.S. cents a liter.

Reporting by Khaled Yacoub Oweis; Editing by Charles Dick