Iran Hikes Fuel Prices Again Amid Economic Strain and Energy Shortages

Iran has implemented another increase in petrol prices as the government grapples with shrinking revenues and the escalating costs of maintaining its subsidy programs. According to state media, motorists will continue to pay the same rate for the first 60 litres (16 gallons) of fuel per month, but a new pricing tier will apply to the subsequent 50 litres (13 gallons). For consumption exceeding 110 litres (29 gallons) monthly, the price per litre doubles from 50,000 riyals to 100,000 riyals, equivalent to approximately $0.07.

Despite boasting some of the lowest fuel prices globally, Iran is facing significant economic challenges exacerbated by ongoing conflicts with the United States. Punitives sanctions and a naval siege on Iranian ports by US forces have severely impacted state revenues, prompting officials to consider adjustments to fuel subsidies for months.

Mohammad Bagher Ghalibaf, speaker of the Iranian parliament, addressed the nation via television earlier this month, emphasizing the need for conservation. “If we consume it properly, we can manage with the amount of gasoline we produce in the country,” Ghalibaf stated. He acknowledged that while individual responsibility is key, a portion of the high consumption burden lies with domestic industry.

The country currently consumes more oil than it produces domestically, failing to reach pre-war production or export levels. The severity of the energy crisis was highlighted by videos circulating on social media showing extensive queues at petrol stations in Tehran.

This marks the second fuel price hike since December, raising fears of further increases and potential civil unrest. Large-scale antigovernment protests erupted in 2019 following similar price hikes. Iranians are already enduring the effects of a contracting economy, rampant inflation, and a depreciating rial.