TEHRAN — In a move aimed at easing fiscal pressure and encouraging more efficient fuel use, Iran announced on Tuesday a new gasoline price tier for its heaviest consumers. Under the revised system, drivers who purchase more than 110 liters (29 gallons) of gasoline in a month will pay 100,000 rials per liter, roughly seven cents, effectively doubling the rate applied since December.
Policy Details and Intended Benefits
The government framed the adjustment as a response to the “current situation,” noting that the additional revenue will be directed to households. State oil distribution chief Keramat Veis Karami told the IRNA news agency that the higher rate will affect about 15 percent of gasoline buyers.
Karami also highlighted that domestic consumption reached a record 145 million liters (38 million gallons) per day in August, surpassing the country’s production capacity of 122 million liters per day. The shortfall is being met through imports, further straining the national budget.
Economic Context
Iran continues to offer some of the world’s lowest gasoline prices, a legacy of decades‑long subsidies. However, the country is wrestling with an annual inflation rate of roughly 67 percent, according to the national statistics center. The rial has also been sliding toward record lows, with the U.S. dollar trading at about 2.22 million rials on Monday.
Economists note that raising fuel prices can help temper excessive consumption, which they attribute to an aging vehicle fleet, limited spare parts, and insufficient public transportation infrastructure. By making gasoline more costly for heavy users, the policy seeks to reduce demand and lessen the fiscal burden of subsidies.
Potential Risks and Public Reaction
While the price hike may curb wasteful usage, experts warn it could also stoke inflation further, affecting everyday Iranians already feeling the pinch of a depreciating currency. Historical precedent shows that gasoline price increases have sparked public unrest; a 2019 hike triggered nationwide protests that were met with a harsh crackdown, resulting in over 300 deaths.
Cheap gasoline has long been viewed as a birthright in Iran, with price adjustments historically provoking mass demonstrations, dating back to 1964 when a hike led the Shah to deploy military vehicles to replace striking taxi drivers.
Looking Ahead
The new pricing structure is part of a broader effort by Iranian authorities to balance fiscal sustainability with social stability. By channeling the extra revenue to households, the government hopes to mitigate the impact on lower‑income families while encouraging more responsible fuel consumption.
Observers will be watching how the policy influences both the domestic market and the broader economy, especially as Iran continues to navigate the dual challenges of international sanctions and internal economic turbulence.
Original reporting: Alexandria, VA News – WTOP News — read the source article.
