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 logist
ic 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 .
