Iran Increases Petrol Prices for Heavy Users Amid Currency Decline
Iran has doubled petrol prices for consumers exceeding their monthly quota, a move that comes amid rising inflation and declining purchasing power. The new rate, effective from early Tuesday, applies to purchases above 110 litres (29 gallons) per month. Consumers exceeding this limit will now pay 100,000 rials (approximately 7 cents) per litre, a significant increase from the previous rate set in December.
The Iranian government stated that the additional revenue generated from this price hike would be distributed to households. While the announcement referenced the “current situation,” it did not specifically mention the ongoing conflict with the United States. This marks the second increase in petrol prices since December, a politically sensitive issue in Iran. A similar price rise in 2019 led to nationwide protests and a violent crackdown that resulted in over 300 deaths.
Currency Hits Record Lows
This price increase coincides with a sharp decline in the value of the Iranian currency. On Monday, the US dollar was trading at 2.22 million rials. Despite having some of the lowest petrol prices globally, the new rates for heavy users add further strain on a population of over 90 million. Keramat Veis Karami, CEO of the state oil distribution company, indicated that the new pricing structure would affect 15 percent of consumers.
The change also comes as Iran faces record fuel consumption levels. In August, the country consumed 145 million litres (38 million gallons) of petrol daily, surpassing its domestic production capacity of 122 million litres per day, necessitating imports. The government aims to reduce consumption, which experts attribute to aging vehicles and inadequate public transportation. However, rising petrol prices are expected to exacerbate inflation, which is currently around 67 percent, according to the country’s statistics center.
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