As fuel prices rise again, Iran’s government urges citizens to cut back
Iran has raised petrol rates for motorists again as the administration struggles to manage declining revenues and sustain a costly subsidy regime.
Iran has raised petrol rates for motorists again as the administration struggles to manage declining revenues and sustain a costly subsidy regime.
Article outline
- What happened
- Why it matters
- The bottom line
Key points
- Massive antigovernment protests in 2019 kicked off after anger over fuel cost increases.
- What is clear is that we need to save gasoline in our consumption.
- Iran has been consuming more oil than it produces domestically or match pre-war production or export levels.
- In a sign of the energy crisis, videos circulating on social media reportedly show long queues at petrol stations in Tehran.
- It is the second time petrol rates have climbed since December, with reservations concerning further increases prompting unrest.
In practice, the cost of petrol will remain the same for the first 60 litres (16 gallons), state media noted, but there will be a higher cost bracket for the next 50 litres (13 gallons). Rates will double from 50, 000 riyals to 100, 000 riyals ($0.07) per litre (0.3 gallons) for motorists who consume more than 110 litres (29 gallons) a month.
Iran has some of the lowest petrol rates in the world, but due to ongoing economic difficulties against the backdrop of the war with the US, including punishing sanctions and a siege on Iranian ports by US forces, Iranian authorities have for months considered adjusting fuel subsidies to produce up for lost revenues.
"If we consume it properly, we can manage with the amount of gasoline we produce in the country, " Mohammad Bagher Ghalibaf, speaker of the Iranian parliament, remarked in a TV address earlier this month. "What is clear is that we need to save gasoline in our consumption. Of course, part of the responsibility for this high consumption does not lie with our individuals; it lies with our industry."
Massive antigovernment protests in 2019 kicked off after anger over fuel cost increases. Iranians are already feeling the impact of a downturn in economic activity, high inflation, and a drop in the value of the rial.
In short, as fuel prices rise again, Iran's government urges citizens to cut back is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.
