 Iran saw the price of gasoline rise by up to 75% at midnight on Thursday after state subsidies were removed.
“We have been preparing for two months to implement these plans in provinces, cities and rural areas,” said Abdolreza Rahmani Fazli, Iran Interior Minister to state news agency IRNA.
The already limited supply of Subsidised gasoline rose from 4,000 Rials (16 cents) per litre to 7,000 Rials (28cents). The price for gasoline sold outside that quota rose from 7,000 Rials to 10,000 rials. Diesel and compressed natural gas prices also leapt.
Automotive fuel in Iran remains among the cheapest in the world; however the price hikes will be unwelcome in a country where there is mass unemployment.
The hikes will test the president’s support among a population fed up with the high inflation as he engages in talks with world powers to ends sanctions imposed over Iran’s nuclear programme.
Iranians rushed to the pumps to fill their cars before the price rise, but there were no sudden reports of disorder, unlike in 2007 when there were riots which saw gas stations ration fuel for the first time.
The subsidy cut was a risky move by President Hassan Rouhani who is hopeful that it will improve the Iranian economy despite Western sanctions.
($1 = 24797.0000 Iranian Rials)
