Iran Raises Gasoline Prices for the First Time Since 2019 as Economic Pressure Grows

Iran raised gasoline prices on Saturday in its first major change since the deadly 2019 protests. The country introduced a new third pricing tier for fuel. The move took place in Tehran and across the country as the government tried to slow rising subsidy costs.

Officials said the decision was driven by a weak rial and heavy economic pressure. Iran still sells some of the world’s cheapest fuel, but the state can no longer cover the rising subsidy bill.

Iran Gasoline Price Hike Marks Major Shift in Fuel Policy

Iran’s new pricing tier adds a charge of 50,000 rials per liter after existing quotas are used. Drivers still get 60 liters per month at the subsidized rate. They get another 100 liters at a higher but still discounted rate.

According to Reuters, stations in Tehran saw calm lines on Saturday. Police were nearby but there were no signs of unrest. The government appeared cautious as tensions remain high after recent regional conflict.

Iran has long struggled with subsidy costs. The International Energy Agency has ranked the country among the highest subsidy spenders in the world. It reported oil subsidies of about $52 billion in 2022. Economists in Tehran warn that subsidies have pushed the country into a cycle of inflation and deficits.

Drivers said the price hike was expected. Many said they feared deeper increases. Some said the new costs feel like another form of tax in an already weak economy.

Impact of the Fuel Price Increase on Iran’s Economy and Public

Iran’s inflation rate sits near 40 percent. Analysts say every fuel increase pushes daily costs even higher. Many citizens already hold several jobs to keep up with expenses.

Cheap fuel has long shaped Iran’s labor market. Millions work as taxi drivers through online platforms. Low fuel prices allowed more people to work flexible hours and earn extra income. The new rate will raise their costs and may cut earnings.

Officials said the increase is the first step in a longer plan. Prices will be reviewed every three months. Economists believe larger hikes are likely as Iran looks for ways to shrink its budget gap.

Still, older drivers remember the 2019 protests. More than 300 people were killed in the crackdown, according to rights groups. Many citizens now say protests feel pointless. They fear that speaking out will lead to arrests or worse.

Thought you’d like to know-

Q1: Why did Iran raise gasoline prices?

Iran raised prices to ease pressure on its budget. The state spends billions on subsidies each year. The weak rial made the system even harder to maintain.

Q2: How much is the new gasoline price?

The new tier costs 50,000 rials per liter. It applies after drivers use their existing monthly quotas. Even with the increase, fuel remains among the cheapest in the world.

Q3: Did the price hike cause protests?

There were no major protests reported on Saturday. Reuters said gas stations in Tehran were calm. Police were present but there were no signs of unrest.

Q4: How will the price increase affect inflation?

Economists warn each 10,000-rial increase can raise inflation by up to 5 percent. Iran already faces high inflation near 40 percent. The new rate may push prices higher.

Q5: Will there be more price increases?

Officials said prices will be reviewed every three months. Analysts expect more hikes as the government tries to cut subsidy costs. Future changes may depend on public reaction.