Ahead of Iran’s presidential runoff, a floated rise in gasoline prices may spark new protests

Dubai, United Arab Emirates — Like Iran second round of the presidential elections As he approaches, comments from a campaign official of reformist Masoud Pezeshkian raised the possibility of his government raising government-set gasoline prices, a move that has sparked nationwide protests in the past.

Although still hesitant, economists They have long warned that Iran needs to overhaul its subsidy system, which is estimated to cost the Islamic Republic tens of billions of dollars a year. In 2019, a similar surge triggered mass demonstrations and a bloody crackdown that grew even more intense after the 2022 protests over the death of Mahsa Amini.

On Saturday, Pezeshkian’s campaign manager, Ali Abdolalizadeh, told reporters that his potential presidency would see price increases on fuel and other items handled without any protest.

“Don’t worry, gasoline at any price, you will see that people will allow it calmly and cooperatively,” Abdolalizadeh said.

Hardliners immediately accused Pezeshkian of planning to raise fuel prices eight times. Pezeshkian’s camp claimed the low price Saeed Jalili, that former nuclear negotiator Pezeshkian faces in Friday’s election would be 12 times higher, according to comments from people close to the hardliners. That official, Majid Karimi, suggested that Iranians should pay the “world price” at the pump.

People gathered at a rally in Jalili carried a sign warning against any price increases, saying: “We do not want gasoline at the price of 250,000 rials” per liter. That would be 40 cents a liter, or $1.55 a gallon.

But no matter who is elected, Iran is likely to see fuel price increases.

Iran raised minimum gasoline prices by 50% to 15,000 rials per liter in 2019, or 12 cents per liter, or about 50 cents per gallon. But with the decline of the Iranian currency since then, that is now 2 cents per liter, or 9 cents per gallon. After a monthly fee of 60 liters, a liter costs 30,000 rials. Back then that was equivalent to almost 24 cents per liter, or 90 cents per gallon, but now it is almost 5 cents per liter, or 18 cents per gallon. By comparison, an average gallon of regular gasoline in the United States costs $3.50, according to AAA.

Iran spent $52 billion on oil subsidies in 2022, according to the Paris-based International Energy Agency, the most of any country in the world. Iran spent 36% of its total gross domestic product, or $127 billion, that year on subsidies for oil, electricity and natural gas.

Although it costs the Iranian government tens of billions of dollars in subsidies, cheap gasoline is practically considered a birthright in the country, home to the world’s fourth-largest crude oil reserves despite decades of economic problems since its inception. Islamic Revolution of 1979. Gasoline remains among the cheapest in the world, in part to help keep costs down for the underemployed, who often drive taxis to make ends meet.

The 2019 increases led to Demonstrations in about 100 cities and towns. throughout Iran, with gas stations and banks set on fire. The crackdown that followed killed at least 321 people, according to Amnesty International. Thousands were detained.

During the 2022 protests over Amini’s death, after she was arrested for wearing her hijab that was disliked by security forces, more than 500 people were killed and 22,000 imprisoned, part of a pattern of growing unrest. in the Islamic Republic.

On the streets of Tehran, people are increasingly concerned about rising fuel prices.

“Do you know what that means? I can buy fuel to set everything on fire,” said taxi driver Rasoul Kashani, 45. “I will not vote at all. They both plan to massacre ordinary people.”

Shahrooz Imani, a 41-year-old mother of three, said she planned to vote for Jalili because she believes he cares more about the poor, given Pezeshkian’s apparent plan to raise prices.

“This will deprive us of our daily needs, including vegetables and bread, if the price of fuel increases,” he said.

A bookseller on Tehran’s famous Enghelab (or “Revolution”) Street also cared about the poor.

“We cannot tolerate this again, we may have to flee to neighboring countries to work,” Abbas Irani said.

Mahdi Robati, a business analyst and CEO of an Iranian brokerage firm, warned that Jaili’s economic policies and hardline positions could cause economic damage on the scale of China’s Mao Zedong.

“The result of this thinking is the total destruction of the rial, the spread of absolute poverty throughout the country, the deprivation of all political and social freedoms, hunger and total couponization of the economy, and many other nightmarish consequences “, wrote. on the social media platform X.

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Karimi reported from Tehran, Iran.