Iran Increases Fuel Prices Again and Urges Citizens to Conserve Amid Economic Pressures

Iran has raised petrol prices for motorists once more as the government struggles to manage declining revenues and sustain a costly subsidy regime. State media reported that the price of petrol will remain the same for the first 60 litres (16 gallons), but a higher price bracket will apply to the next 50 litres (13 gallons). For motorists consuming more than 110 litres (29 gallons) a month, prices will double from 50,000 riyals to 100,000 riyals ($0.07) per litre (0.3 gallons).

While Iran maintains some of the lowest petrol prices globally, ongoing economic difficulties stemming from the war with the US—including severe sanctions and a US forces siege on Iranian ports—have driven officials to adjust fuel subsidies to offset lost revenues. Mohammad Bagher Ghalibaf, speaker of the Iranian parliament, emphasized the need for conservation in a recent TV address, noting that domestic production can suffice with proper consumption, though he also acknowledged that industry shares part of the responsibility for high consumption levels.

Iran relies on oil exports for roughly 90 percent of its budget, but these have dropped from about 4 million barrels per day (bpd) down to about 2.2 million bpd by August, with domestic consumption now exceeding domestic production. Reflecting this deepening energy crisis, social media videos show long queues forming at petrol stations in Tehran. This marks the second petrol price hike since December, raising concerns about potential unrest following the massive antigovernment protests triggered by fuel price increases in late December 2022 and early 2023. Meanwhile, Iranians continue to face a severe economic downturn, high inflation, and a depreciating rial.