Iran: Fuel Price Rise Spells Trouble

by Harish Chandola

Fuel price rise in Iran, that has created a turmoil in the country since it was announced November 15, has led to the death of over 100 people and dislocation of its day-to-day life. It is unlikely to end soon.

On November 15 midnight it had announced a 50 per cent increase in the price of the first 60 litres of petrol that may be bought every month and a three-fold increase for more purchases. Various branches of the government closed ranks behind that decision of the newly-formed Iranian Supreme Council.

Despite the protests, the government has shown no sign of backing down or changing its decision. At places it opened fire to protect public buildings, turned off the internet and jammed satellite television, in support of its decision. Complaints of petrol price rise have led to burning portraits of the country’s supreme leader, Ayatollah Ali Khamenei, and ruling religious leaders or the Mullahs.

The Supreme leader has called the protest leaders “thugs”.

This time middle-class car owners have joined the protests and the Gulf between the rulers and car users has widened.

The most violent protests occurred in Khuzestan, an oil rich province on the Persian Gulf, and suburbs and small towns ringing the capital, Tehran.

Complaints over petrol prices have turned into denunciations of the regime. Protesters have burned portraits of the supreme leader, Ayatollah Ali Khamenei, and raised slogans against the regime of Mullahs (religious leaders). The gulf between the ruling clergy and the country’s 83 million people appears to have widened.

On November 15, the government had announced a 50 per cent increase in price of the first 60 litres of petrol that tanks of most cars contain, bought every month and a three-fold increase on more purchases.

Cheap fuel allowed many Iranians to commute to cities from distant satellite towns where they live and where rents are low or even to drive in from provinces every day.

The government has shown no signs of backing down.

Iran had the world’s most heavily subsidised petrol, costing less than bottled water. There refined petrol cost less than crude. The Republic’s founder, Ayatollah Rohallah Khomenei, had promised its people free energy in 1979.

Some people were making a living by smuggling petrol abroad.

Food prices in the country have been rising faster than inflation and the people have exhausted their savings. Mr Rouhani says the savings in petrol subsidies will be distributed as welfare. Some 18 million households (three quarters of Iran’s population) will qualify for it.

Iran is still the Middle East’s second biggest economy, after Saudi Arabia.

The US President, Donald Trump, is likely to proclaim Iran’s troubles as a success of his foreign policy. Mike Pompeo, America’s Secretary of State, tweeted that the US was with the Iranian protesters but the unrest is unlikely to topple the Tehran regime as such statements have no effect, as in the past.

Veteran journalist Harish Chandola is a prolific writer with deep knowledge of developments in West Asia and the Arab world.