Iran to Double Gas Prices – The price of gasoline will be doubled in Iran amid plans to contain growing fuel shortages.
Fatemeh Mohajerani, a spokesperson for the regime, said on Monday that the third-tier price will rocket from 5,000 to 10,000 tomans per liter from September 8. The first 60 liters per month will still be priced at 1,500 tomans per liter, with an additional 50 liters available at 3,000 tomans per liter.
Iran’s Drones That Russia Is Using. Image Credit: Creative Commons.
Not All Motorists Will Be Impacted
The increase will only apply to motorists who have already used over 110 liters in one month. Reuters said that even the new price is still exceptionally low by global standards, at around four U.S. cents per liter at the free-market exchange rate.
Mohajerani said “current conditions” were to blame for the decision, and that policies had incentivized excessive fuel consumption for years. According to Iran International, she said the government wanted to restore the balance between supply and demand and strengthen “national resilience.” She also claimed the additional revenue would go toward supporting household livelihoods, although she did not explain how it would be distributed.
Already, Iran consumes much more gasoline than it produces. The head of the country’s Energy Optimization Organization, Esmail Saqqab Esfahani, said in August that the daily deficit was running at roughly 14 million to 15 million liters.
Drivers Sleeping in Cars to Line Up for Fuel
Last week, Deutsche Welle reported that motorists were sleeping in their cars overnight to purchase fuel the following morning. Some stations were even forced to close after running out of fuel.
“I’m in the gasoline line right now. It took about 45 minutes just to get this far,” a resident of Karaj, west of Tehran, told DW. “Yesterday I went to several stations. Some were closed, some had no gasoline and others had very long queues.”
The New York Times described a similar picture in Tehran, Isfahan, Bandar Abbas, and Mashhad. Gasoline supply issues in Iran were not solely caused by the current war.
Many decades of cheap subsidies, inefficient vehicles, smuggling, and rising consumption had already left domestic production unable to meet demand comfortably. But damage to energy infrastructure, difficulties in importing refined products, and the U.S. naval blockade are making it much harder to continue previous strategies.
Hossein Samsami, a member of parliament’s Economic Commission, warned last month that increasing gasoline prices under current conditions could be like a “spark in a powder keg.”
A sudden fuel price increase in November 2019 set off nationwide demonstrations that soon turned into massive anti-government unrest. An internet blackout followed, and a subsequent Reuters investigation concluded that about 1,500 people were killed in the crackdown.
Iran’s Currency in Crisis
On the economic side, pressures continue to grow. Iran’s rial fell to a record low of roughly 2.2 million per U.S. dollar last week. Central Bank figures cited by IranWire put year-over-year urban inflation at 84.4% in August, with the rolling 12-month rate reaching 65.1%.
Tehran has even created an “economic war” command center inside the Economy Ministry to coordinate responses to business, trade and financing problems caused by the conflict.
The same blockade complicating Iran’s fuel supply is still choking off its most important source of foreign currency. Reuters reported that Iranian crude loadings collapsed from around 2 million barrels per day in March to just 220,000 to 255,000 barrels per day in August after Washington imposed a naval blockade on July 14.
Treasury Secretary Scott Bessent recently told Fox News that Iran possessed “probably only about 30 million barrels” of crude remaining that China had not bought already.
He predicted that these stocks “will run out soon,” and that the ongoing American sanctions and blockade were powerful “one-two punches” against the Islamic Republic.
Brent crude was trading around $97 per barrel on Monday as energy markets scrambled to respond to renewed U.S.-Iran fighting. Axios reported that a Brown University estimate put the additional energy cost borne by U.S. consumers since the war began at $100 billion.
Tensions Ramp Up Again in Strait of Hormuz
Tehran has announced plans to establish a new restricted maritime zone close to the waterway. Meanwhile, U.S. Central Command said over the weekend that it had “permanently disabled” a trio of Iranian oil tankers after Iran launched ballistic missiles toward American warships.
The Islamic Republic’s parliament speaker Mohammad Bagher Ghalibaf said in retaliation that “the era of proportionate responses has come to an end” and warned that further attacks would be met with a “faster, more intense and more painful response.”
About the Author: Georgia Gilholy
Georgia Gilholy is a journalist based in the United Kingdom who has been published in Newsweek, The Times of Israel, and the Spectator. Gilholy writes about international politics, culture, and education.
