JAKARTA - Iran announced new prices for subsidized gasoline amid efforts to control rising costs for the first time since the price hike in 2019 that sparked nationwide protests.
Cheap gasoline has been considered a birthright in Iran for generations, sparking mass demonstrations since 1964 when price hikes forced the Shah to deploy military vehicles onto the streets to replace striking taxi drivers.
However, the Iranian regime is facing increasing pressure from the country's rapidly depreciating rial currency and economic sanctions imposed over Tehran's nuclear program.
That makes the cost of having one of the world's cheapest gas at a price of a few cents per gallon much more expensive.
However, the government's hesitant move to raise prices likely signals it wants to avoid confrontation with a weary public after Israel launched a 12-day war on the country in June.
"Our dissatisfaction has not borne fruit," said Saeed Mohammadi, a teacher who works as a taxi driver in his spare time to make a living. "The government does whatever it likes. They don't ask the people whether they agree or not," he added.
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The new pricing system, which was implemented on Saturday, December 13, added a third price level to the country's long-running subsidy system.
The revised structure allows motorists to continue receiving 60 liters (15 gallons) per month at a subsidized price of 15,000 riyals per liter, or 1.25 US cents, and the next 100 liters (26 gallons) will remain at 30,000 riyals per liter, or 2.5 cents.
Purchases above this amount will be subject to a new price scheme of 50,000 rials per liter, or about 4 cents. Iran introduced fuel rationing in 2007, but it has not reduced demand for very cheap gasoline.
Even with the new price, Iran's gasoline prices remain among the lowest in the world.
The difference between the cost of producing and delivering fuel and the price at gas stations is the subsidy paid by the Iranian government.
The Paris-based International Energy Agency (IEA) ranked Iran as the second highest energy subsidy cost country in the world in 2022, after Russia.
The IEA estimates Iran's oil subsidies amounted to $52 billion that year, with Iranian officials admitting tens of billions of dollars a year were used to keep energy prices artificially low.
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