Syria would raise the diesel price in an effort to restructure oil subsidies in a just way, the official newspaper Syria Times reported on Sunday.

The diesel price would increase from the current seven Syrian pounds (about 0.14 U.S. dollars) per liter to 12 pounds (0.24 dollars) and the price of one household gas cylinder would go up to 250 pounds (5 dollars) from 145 pounds (2.9 dollars), the paper said.

Syrian Prime Minister Mohammad Naji Ottri said that in order to alleviate the consequences of the prices lift, Syria would increase government subsidies to common families accordingly.

"A family's average annual consumption of diesel is 800 to 1000liters and one household gas cylinder a month," Ottri was quoted as saying.

"Every family will receive 12,000 pounds (240 dollars) a year and some 1500 centers have been set up throughout the country for citizens' services, where they will receive two coupons of 6,000 pounds (120 dollars) each," he added.

Meanwhile, Ottri said that the heating allowance that government employees receive would remain as it is when the new decision is put into effect.

Such measures were perceived to set right deformations and stop the bleeding of the national economy as government subsidies for oil derivatives would reach 350 billion pounds (7 billion dollars) in 2008 which is a big challenge to the state budget.

Syria has been clinging to a policy of government subsidies for oil derivatives and the price of diesel has been kept at a very low level compared with that in neighboring countries.

And the big difference in price has inevitably resulted in large diesel trafficking between Syria and neighboring states.

Taking Lebanon as an example, Ottri pointed out that this country used to import 750 million liters of diesel a year form Syria, but in 2006-2007 Lebanon imported only 250 million liters and the remaining were smuggled via the borders.

"This means that we have offered about 300 million dollars subsidies for diesel to our brothers in Lebanon," he said. "What about other neighboring countries!" he exclaimed.

In addition, the influx of more than 1.5 million Iraqi refugees equals the burden of 300,000 Syrian families who consume some one billion dollars in diesel, electricity and household gas a year.

All these have staged big financial burdens to the state treasury, Ottri said, adding that other measures, including readjusting tariff of electricity and water, tackling unemployment and carrying out projects of renewable energies, would also be taken in the future.

According to an earlier report, more than one million Iraqis were displaced across Iraq while over two million had to flee to Syria, Jordan and other neighbors.

In Syria alone, the number of the Iraqi exodus has exceeded 1.5million with an estimated 40,000 still coming in every month. (1 Syrian pound = 0.02 U.S. dollar)