Daijiworld Media Network - Tehran

Tehran, Sep 8: Iran on Tuesday introduced a higher price for gasoline sold to its heaviest users, state media reported, marking the second such increase since December as the country continues to face severe economic pressures amid months of war.

Under the new pricing system, consumers purchasing more than their monthly quota of 110 litres of gasoline will have to pay 100,000 rials, or about seven US cents, per litre. The new rate is twice the price these consumers have been paying since December.

The government did not specifically refer to the war with the United States in its announcement, instead citing the "current situation". It said the additional revenue generated from the price increase would be distributed among households.

The increase comes at a sensitive time for Iran, where fuel price hikes have previously triggered widespread public anger. A gasoline price increase in 2019 sparked nationwide protests that were met with a severe crackdown, reportedly leaving more than 300 people dead.

Iran continues to have one of the world's lowest gasoline prices, but the latest increase is expected to add to the financial pressure on the country's population of more than 90 million.

The Iranian currency has also fallen to record lows, further weakening purchasing power. The US dollar was trading at around 2.22 million rials on Monday.

Keramat Veis Karami, chief executive of Iran's state oil distribution company, said the new gasoline price would affect around 15 per cent of consumers, according to the official IRNA news agency.

Karami said gasoline consumption reached a record 145 million litres per day in August, significantly exceeding Iran's domestic production capacity of 122 million litres per day. The shortfall is being met through imports.

Authorities have argued that higher fuel prices could help reduce excessive consumption. Experts have attributed Iran's high gasoline consumption partly to the country's ageing vehicle fleet and difficulties in obtaining spare parts, as well as inadequate public transportation.

However, economists have warned that raising gasoline prices could further fuel inflation in an economy already under severe strain. Iran's Statistics Center has estimated the country's annual inflation rate at around 67 per cent.

Cheap gasoline has long been regarded by many Iranians as an entitlement, making fuel price increases politically sensitive. Price hikes have triggered public demonstrations in the country for decades, including in 1964, when an increase led to a strike by taxi drivers and prompted the shah's government to deploy military vehicles to replace them.

The latest increase therefore comes as the Iranian government attempts to curb fuel consumption and ease pressure on domestic supplies while managing worsening inflation, currency depreciation and the broader economic impact of the ongoing conflict.