Iran raised the price of subsidized gasoline today, for the first time since 2019, when fuel price hikes sparked massive protests that left more than 300 people dead.
Tehran is facing increasing pressure due to the falling value of its currency, the rial, as well as economic sanctions imposed over its nuclear program.
The new billing system introduces a third price tier to the country's long-standing subsidy system, allowing drivers to continue to receive 60 liters of gasoline per month at a subsidized price of 15.000 riyals per liter, or about 35 dinars, while the next 100 liters will remain at 30.000 riyals per liter, or about 71 dinars.
Iran introduced fuel consumption rationing back in 2007, but that still hasn't reduced demand for ultra-cheap gasoline, while prices, even at the new rate, in the country remain among the lowest in the world.
The difference between the cost of fuel production and delivery and the price at the pump is a subsidy paid by the state.
The Paris-based International Energy Agency (IEA) ranked Iran as the world's second-largest spender on energy subsidies in 2022, just behind Russia.
Today's price hike is the most significant change to Iran's fuel subsidy system since 2019, when a sudden 50 percent jump in subsidized prices and a 300 percent increase in the rate for purchases above quota sparked protests in more than 100 cities and towns across the country.
According to Amnesty International, at least 321 people died in the riots, and thousands remained in detention.
Critics claim that every 10.000 rial (about 24 dinars) increase in gasoline prices increases inflation by five percent, while the current annual inflation rate in Iran is around 40 percent.
Cheap fuel has resulted in increased employment in Iran, with more than eight million residents working as taxi drivers through online platforms, almost 10 percent of the population.
Energy Minister Mohsen Paknedjad said regarding the price hike that it represents "the beginning of a change in the trend of fuel consumption."
Experts claim that Iran could raise oil prices further in the future, and the government reviews prices every three months.
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