Protests in Iran against rising prices at the pump

The Iranian government announced Friday a rise of at least 50% of the price of gasoline, causing a wave of discontent.

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Almost a year to the day after the first day of mobilization of "yellow vests" in France, it is in Iran that the population is protesting against a rise in fuel prices. Saturday, November 16, Iranians again took to the streets in several cities, the day after the surprise announcement by the government of a rise in the price of gasoline.

The reform was presented as a measure whose profits will be redistributed to struggling households, in an oil country whose economy – suffocated by US sanctions – is expected to shrink by 9% in 2019, according to the International Monetary Fund. But it immediately sparked divisions, especially on social networks and within the political class, which criticized the timing of the government, a few months of legislative elections scheduled for February.

A few hours after the announcement of rising prices, the Iranians went down on Friday night in the streets of a dozen cities, according to the official IRNA news agency (Islamic Republic News Agency – "News Agency of the Islamic Republic of Iran"), which evokes gatherings "Of limited extent"except in Sirjan, in the center, where demonstrations were "Important".

"One person was killed" and several civilians were injured Friday in Sirjan, said Mohammad Mahmoudabadi, acting governor of the city quoted by the IRNA, without being able to specify the cause of his death.

For the second day, Iranians demonstrated on Saturday and protests spread to new cities, according to IRNA. "Some drivers turned off their car's engine in the middle of the road, causing traffic jams" in several places, the press agency added.

At least 50% increase

The president, Hassan Rohani, had already tried in December 2018 to raise gas prices, but the measure was blocked in Parliament, while the country was shaken by unprecedented protests provoked by the implementation of 'austerity.

On Friday, the Iranian government announced an increase of at least 50% in the price of gasoline, which was previously set at 10,000 rials, or less than 8 cents. It will now be 15,000 rials (11 cents) for a maximum of 60 liters per month. Each additional liter will cost 30,000 rials (22 euro cents).

Iran is one of the countries in the world where gasoline is the most subsidized. Encouraged by low prices, fuel consumption is high, with 90 million liters consumed per day for 80 million people.

The benefits of rising gas prices must be redistributed to Iranians who are " under pressure (economic) ", or nearly 75% of the population, according to Hassan Rohani. The measure is expected to yield 300 trillion rials (about 2.3 billion euros) a year, according to Planning and Budget Officer Mohammad Bagher Nobakht.

Amounts paid to some 60 million Iranians will go from 550,000 rials (about 4.20 euros at the free market rate) for couples to 2 million rials (15.80 euros) for households of five or more people. The first installments will take place in ten days, according to Nobakht. "No rial will go to the treasury"assured President Rohani.

Strong smuggling

According to Mr. Nobakht, the measure was decided by the High Council for Economic Coordination, composed of the President, the President of Parliament and the Chief Justice.

Low fuel prices also lead to heavy smuggling, estimated by IRNA at between 10 million and 20 million liters per day, mostly in neighboring Pakistan, where fuels are more expensive.

Rohani said Friday he has resisted calls for the government to raise gas prices to other countries in the region, saying it would boost inflation, which is already very high.

Smuggling has also been boosted by the fall of the rial on the foreign exchange market, linked in part to economic sanctions reinstated from 2018 by the United States, after their withdrawal from the 2015 nuclear agreement.


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