Gasoline Prices Up In Iran on Subsidies Cut

Posted by Joseph R. Fonseca
Thursday, April 24, 2014
President Hassan Rouhani

 

Gasoline prices in Iran leapt by up to 75 percent at midnight on Thursday, as state subsidies were cut, a risky move that President Hassan Rouhani hopes will improve an economy battered by Western sanctions.

The price hikes will test Rouhani's support among a population fed up with the high inflation that he has pledged to reduce as he pursues talks with world powers aimed at ending sanctions imposed over Iran's nuclear programme.

Iranians rushed to the pumps to fill their cars before the price surge, but there were no immediate reports of unrest, unlike in 2007 when there were riots at some gas stations when cheap fuel was rationed for the first time.

"We have been preparing for two months to implement these plans in provinces, cities and rural areas," state news agency IRNA quoted Interior Minister Abdolreza Rahmani Fazli as saying.

"But it is expected that (it) will take place without any problems or displeasure from people."

Subsidised gasoline, available to each motorist in limited amounts, rose from 4,000 rials ($0.16, using the central bank's official exchange rate) a litre to 7,000 rials ($0.28) The price for gasoline sold outside that ration rose from 7,000 rials to 10,000 rials. Diesel and compressed natural gas prices also rose.

That still makes automotive fuel in Iran among the cheapest in the world, but the price hikes will be unwelcome in a country where a quarter of the adult population is jobless or under-employed.

Rouhani's predecessor, Mahmoud Ahmadinejad, launched the subsidy cutting programme in December 2010 when prices of staple foods and utilities bills, as well as gasoline, soared overnight.

The move, coupled with the impact of tightened sanctions by Europe and the United States, pushed inflation from 8.8 percent in August 2010 to around 40 percent by the end of Ahmadinejad's term in 2013.

Rouhani, who secured a surprise election win last June, has said the money saved by cutting state subsidies will be used to generate jobs for masses of unemployed youth.

If he can convince Iranians he can improve the economy, they may forgive him the price rises which will, in the immediate term, counter his efforts to reduce inflation, which is currently at 35 percent.

"Of course I don't want prices to go up, but the reality is that the prices have to become real," said a 30-year-old communication specialist in Tehran.

"But I expect more services from the government in return, such as health and transportation."

(Additional reporting by Mehrdad Balali; Editing by Robin Pomeroy)

($1 = 24797.0000 Iranian Rials)

Maritime Reporter August 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Energy

Libya Plans to Sell Ex-rebel Tanker

Libya plans to sell a tanker that a former rebel group used in an attempt to bypass the Libyan government and export oil on its own last year, the Tripoli-based state prosecutor said on Thursday.

Former CIA Spy Ship Becomes Victim of Oil Slump

A ship built by the CIA for a secret Cold War mission in 1974 to raise a sunken Soviet sub is heading to the scrap yard, a victim of the slide in oil prices.   Christened the Hughes Glomar Explorer,

Hanjin Rolls Out First Philippine-made LPG carrier

Hanjin Heavy Industries and Construction Philippines (HHIC-Phil), which operates the world's fourth shipbuilding facility in Subic Freeport Zone, unveiled the

News

USCG AIS Mandate Resource Center Launched

McMurdo informs it has launched an online resource center at to help impacted vessel operators comply with the requirements of the United States Coast Guard (USCG)

Libya Plans to Sell Ex-rebel Tanker

Libya plans to sell a tanker that a former rebel group used in an attempt to bypass the Libyan government and export oil on its own last year, the Tripoli-based state prosecutor said on Thursday.

RYDLYME Marine Selects GoM Distributor

RYDLYME Marine has named R Carter & Associates, Inc. of Mobile, Ala. a new stocking distributor for the Gulf of Mexico area, targeting shipyards, larger workboats,

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Navigation Pipelines Port Authority Salvage Ship Electronics Ship Simulators Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.5041 sec (2 req/sec)