The so-called Islamic State has been forced to slash salaries to its fighters and has even asked Raqqa residents to pay utility bills in black market dollars after rounds of crippling airstrikes from western forces.
The extremist group, which once bragged about developing its own currency, is struggling to cope with coalition forces pounding the group’s de facto capital.
Paying for replacement weapons and wages for its troops accounts for two-thirds of the group’s budget, according to an estimate by Aymenn Jawad al-Tamimi, a researcher with the Middle East Forum who sources Islamic State documents.
Residents have also spoken out about the costly operations, with some stating that inhabitants can only leave some occupied cities in Syria if they pay $1,000 (£700).
Other inhabitants claim the airstrikes are beginning to affect the morale of the extremist troops on the ground.
A resident, who asked only that his first name Oussama be used because he still has family in the city, said dozens of residents of al-Bab, in Syria, have fled, ignoring orders from the extremists.
"You can sense the frustration, their morale is down," Oussama said of the fighters.
Another former resident of Raqqa, now living in Gaziantep, Turkey, said the road to Mosul was cut off late last year, and prices have risen swiftly — gas is up 25 percent, meat up nearly 70 percent, and sugar prices have doubled.
The Soufan Group, an international strategic consultancy firm, said in a recent analysis that the group is looking for alternative funding streams in Libya, where it is under less pressure — and doesn't face airstrikes.
Islamic State budget cuts:
Food rations(01 of04)
Open Image ModalEven luxury food items have been cut from the group, including treats such as free energy drinks and Snickers bars that they used to provide for free.
Fighters' meals have been clamped down to two meals a day, according to an anonymous resident.
Meanwhile a former Raqqa resident now living in Beirut told the Associated Press that Syrians abroad are sending remittances in dollars to cover skyrocketing prices for vegetables and sugar.
Salaries(02 of04)
Open Image ModalAirstrikes(03 of04)
Open Image ModalAmerican officials claimed that operations have impacted the groups "ability to fund itself" and vowed to "step up the attack", in November.
A "cash redistribution centre" reportedly used to pay fighters was also hit by US planes on 11 January near its Iraqi stronghold of Mosul.
Footage from the strike appeared to show streams of money being blown into the air.
General Lloyd Austin, head of the US Central Command, told CNN it deprived the group of "millions of dollars".
Attacks such as these are destabilising the group's attempts to pay for weapons, and its ability to repair damaged ones. (credit:Halit Onur Sandal/AP)
Releasing prisoners (04 of04)
Open Image ModalThe terrorist group is also trying to generate funds by offering to release prisoners for a price of $500 (£350) per head, the Associated Press reported.
It has also started to fine civilians for minor crimes such as its strict dress code, as opposed to flogging them, in an apparent way to drum up funds.
According to residents, another move made by the group is to confiscate valuable goods such as cars to be resold in Syria. (credit:Uncredited/AP)