The use of fuel surcharge to fund transport investments in Syria

The increase in economic activities and the size of population is usually associated with more demand on transport sector activities. Furthermore, maintaining, upgrading and modernising transport in an economy would eventually lead to reduce logistic and production costs, and more competitively priced products. However, financing the costs of maintaining and expanding the transport sector is increasingly becoming problematic, particularly when fiscal resources are limited. Introducing surcharge on fuel prices has been proven as a reliable option to mobilise funds necessary to finance transport sector investment. However, fuel surcharges normally lead to price inflation as transport sector outputs are inputs for most economic activities. This paper looks at possible impacts of introducing a fuel surcharge on transport investment financing and price inflation in Syrian economy . Findings show that a considerable part of fiscal funds would be generated from the 10% fuel price surcharge with very little impact on price inflation .