Syria raises gasoline prices

DAMASCUS, March 24 (Reuters) - The Syrian government has raised the price of gasoline by 11 percent, petrol station operators said on Monday.

The hike, the second in two years, is part of a plan to lift fuel subsidies gradually. Gas oil subsidies, which cost an estimated $9.6 billion a year, accounts for a large chunk of the budget and dwarfs all other subsidies.

A litre of gasoline went up as of Saturday to 40 Syrian pounds (89 U.S. cents) from 36 pounds. Gas oil remained unchanged at 7 pounds a litre.

Syrian officials had said that they would tackle gas oil subsidies in 2008, but the government has made no statements on the issue recently, with popular complaints about prices of basic goods rising sharply this year.

Economic officials say higher subsidies were behind the budget deficit rising to 10 percent of gross domestic product in 2007 compared with 6 percent the year before.

Syria, which has been under U.S. sanctions since 2004, has been taking limited steps to liberalise its economy after decades of nationalisation and bans on private investment.

(Reporting by Khaled Yacoub Oweis)