Fuel-Food Price Transmission in a Conflict-Affected Food System: Evidence from Diesel, Wheat, and Sugar Markets in Syria

In the fragile economies of nations torn by civil war, the price of a loaf of bread is rarely just about the cost of wheat. It is a complex signal sent through a broken system, traveling along roads that may be blocked, crossing borders that may be closed, and passing through checkpoints where goods are taxed or seized. For decades, economists have understood that energy and food are deeply linked: fuel powers the tractors that plant crops, the trucks that haul grain, and the mills that turn wheat into flour. When fuel becomes scarce or expensive, the cost of food usually rises. But in a country like Syria, where a prolonged conflict has shattered infrastructure and fractured governance, this relationship becomes difficult to trace. The central question for researchers is not just whether prices go up, but whether the market still functions well enough to move food from where it is available to where it is needed. If the connection between fuel and food prices breaks down, it means that a shortage in one city cannot be solved by sending supplies from another, leaving families hungry even when food exists nearby.

A team of researchers set out to map this broken connection in Syria, examining how the price of global oil influenced the cost of diesel, wheat, and sugar from 2011 to 2024. They focused on three specific commodities to understand different parts of the economy: diesel, which is the lifeblood of transport; wheat, the strategic staple that feeds the population; and sugar, a commodity that relies heavily on imports and distribution networks. By analyzing monthly price data from seven major cities, including the capital Damascus and the eastern city of Deir ez-Zor, the team used advanced statistical tools to see how price changes in one place rippled through the rest of the country over time. Their work reveals a story of a market that did not simply collapse and stay broken, but rather one that fractured under the weight of violence and slowly began to stitch itself back together as routes reopened and stability returned.

The researchers found that the link between global oil prices and domestic Syrian prices was not constant; it was a relationship that appeared and disappeared depending on the security situation. In the early years of the conflict, from 2011 to 2015, the connection was weak. During this period of intense fighting, damaged roads, fuel shortages, and fragmented control meant that even if the price of oil dropped on the global market, it did not necessarily lower the price of diesel or food inside Syria. The market was too disconnected for these signals to travel. However, after 2016, a shift occurred. As some trade routes stabilized and certain areas saw a reduction in violence, the link between global oil and domestic prices began to strengthen. The data showed that by 2016 and continuing into 2018, movements in global oil prices started to show up more clearly in the prices of diesel, wheat, and sugar within Syria. This suggested that the logistical channels necessary to move fuel and food were partially restored, allowing international price signals to once again influence local markets.

This recovery was not uniform across the country, and the researchers discovered a clear divide between the central, western cities and the eastern periphery. Cities like Damascus, Aleppo, and Homs acted as hubs, actively transmitting price changes to other parts of the network. They were the centers where information and goods flowed most freely. In contrast, cities in the east, such as Deir ez-Zor and Qamishli, remained largely isolated. Even though Deir ez-Zor is an oil-producing region, its local markets were so disconnected from the national system that they did not respond to price signals from the rest of the country in the same way. The study showed that while the central cities could adjust to changes in fuel costs and pass them on to food prices, the eastern markets operated in their own silos, shaped more by local conflict and cross-border trade than by national economic trends. This fragmentation meant that a shortage of fuel in the east could not easily be solved by supplies from the west, and price spikes in one region did not necessarily trigger a response from traders in another.

The nature of the connection also depended on what was being sold. The researchers found that wheat, which is a strategic staple heavily managed by the government through procurement and distribution systems, showed stronger connections across the country than diesel or sugar. This suggests that the state's efforts to manage the bread supply helped keep the wheat market somewhat integrated, even when other parts of the economy were struggling. Diesel, which is essential for transport but often subject to local control and smuggling, showed a more fragmented pattern. Sugar, which relies on imports, was sensitive to exchange rates and port access, creating a different kind of price dynamic. The study highlighted that short-term price changes, which happen quickly due to immediate transport costs and fuel availability, were more connected than long-term changes, which are influenced by deeper structural issues like production capacity and policy.

Ultimately, the research paints a picture of a food system that is resilient but fragile. The market did not vanish during the conflict; instead, it adapted to the chaos, with price transmission weakening when violence was high and strengthening when security improved. The findings suggest that rebuilding food security in post-conflict Syria is not just about producing more food, but about restoring the physical and institutional links that allow that food to move. When roads are safe and fuel is available, the market can function, allowing prices to signal where help is needed. When those links are broken, the market fails to perform its most basic role: moving supplies from areas of plenty to areas of need. The study concludes that the ability of a population to access food is inextricably tied to the stability of the transport network and the governance of the fuel supply, proving that in a war-torn nation, the price of a tank of diesel is as critical to survival as the price of a bag of flour.