Iran Abruptly Raises Fuel Prices and Rationing

Iran Abruptly Raises Fuel Prices and Rationing

The authorities in Iran abruptly raised gasoline prices as much as 300 percent early Friday and imposed a strict rationing system, some of the most severe steps taken to manage an economic crisis caused in part by American sanctions.

An announcement carried on state-run television described the changes as a way to help fund subsidies for about 60 million Iranians, or around three-quarters of the population. But the timing of the changes, coming without warning, suggests the government was worried about increasing the price of gasoline in a stressed economy, in which inflation already is running by some estimates at 40 percent.

“Clearly, making this decision in the middle of the night, to take effect immediately, right before a weekend, reflected their concerns about the political implications,” said Henry Rome, an Iran analyst at the Eurasia Group, a political risk consultancy in Washington.

While official media said the price increase was unrelated to the budget, it came as the government is scrambling for ways to compensate for a stark decline in revenue from oil exports, which have shrunk because of sanctions the Trump administration imposed after it withdrew from the Iran nuclear agreement in 2018.

News reports from Tehran described long lines at gasoline stations, with police officers deployed nearby following the announcement, which appeared to have taken many motorists by surprise.

Gasoline has remained a relative bargain in Iran because it is heavily subsidized. The low price also has been partly blamed for undisciplined consumption and has contributed to the country’s urban pollution problem.

Under the changes, the price for a liter of gasoline rose to 15,000 rials, or about 13 cents, from 10,000 rials per liter on Thursday, and a monthly ration for each private car was set at 60 liters. Any purchases over that limit would cost 30,000 rials per liter.

The change was all the more jarring because Iran is endowed with vast quantities of fossil fuels. The Energy Information Administration of the United States ranks Iran as possessing the world’s fourth-largest oil reserves and second largest natural gas reserves.

Just last Sunday, President Hassan Rouhani of Iran bragged that an enormous oil field holding 53 billion barrels of crude had been discovered in southwest Iran, which if confirmed would give the country about 210 billion barrels and make it the No. 3 country in oil reserves behind Saudi Arabia, with 298 billion, and Venezuela, with 303 billion, according to statistics from BP.

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