Iran Raises Gasoline Prices for Heavy Users Amid Deepening Economic Strain

TEHRAN, Iran (AP) — Iran has introduced a higher tier of gasoline prices for its heaviest consumers, state media reported on Tuesday, marking the latest economic strain in a country grappling with prolonged conflict. This is the second fuel price increase since December.

Fuel price adjustments are highly sensitive in Iran, often fueling inflation and public discontent. A similar hike in 2019 triggered nationwide protests and a violent government crackdown that reportedly resulted in the deaths of over 300 people.

While not explicitly referencing the ongoing conflict, the government’s announcement cited the “current situation,” stating that the additional revenue generated from the price hike will be redistributed to households.

Under the revised pricing structure, consumers exceeding their monthly quota of 110 liters (29 gallons) of gasoline must now pay 100,000 rials (approximately 7 cents) per liter—double the rate they have paid since December.

Despite possessing some of the world’s lowest gasoline prices, this increase adds further pressure to Iran’s population of over 90 million. The national currency continues to plummet to record lows, severely eroding purchasing power; on Monday, the U.S. dollar was trading at 2.22 million rials.

Keramat Veis Karami, CEO of the state oil distribution company, stated that the new rates would impact approximately 15% of consumers, according to the official IRNA news agency.

Karami noted that daily gasoline consumption peaked at a record 145 million liters (38 million gallons) in August, while domestic production capacity stands at only 122 million liters per day, necessitating imports to meet the shortfall.

Raising prices is intended to curb excessive consumption, which experts attribute to a fleet of aging vehicles, a shortage of spare parts, and inadequate public transportation systems.

However, experts warn that fuel price hikes will further exacerbate inflation in a nation already battling an annual inflation rate of approximately 67%, according to the country’s statistics center.

For generations, cheap gasoline has been viewed as an unofficial birthright in Iran. Historical price hikes have sparked unrest, dating back to 1964 when an increase forced the Shah to deploy military vehicles to replace striking taxi drivers on the streets.

Just one hour after the new pricing took effect, two out of eight gas stations visited by The Associated Press had closed to adjust their pump rates.

The remaining six stations were active, with queues of about a dozen cars at each.

Security around the fueling stations was highly visible, with both uniformed and plainclothes police officers patrolling the area.

In the queue, 34-year-old Tehran resident Asghar Rahimi expressed skepticism that the price increases would stop there.

“This minimal adjustment will not help the government address deep-seated issues like poverty and unemployment,” Rahimi said. “This is merely the first step; they will likely raise prices again in the coming months.”

Ali Salari, a 55-year-old resident, voiced concerns that the price hike would trigger a ripple effect, raising the costs of essential goods like bread and meat.

“This has been the pattern ever since the government began manipulating gas prices,” Salari noted.

Hamid Mirzei, a 43-year-old Tehran resident, highlighted the soaring cost of food, noting that a basic grocery trip for staples like beans and lentils can now cost up to 100 million rials ($73).

“Life has become incredibly difficult for all of us. Even basic groceries are becoming unaffordable,” Mirzei stated.

“If gasoline prices rise on top of this, things will only get significantly worse,” he added.

Source link