Economists warn Iran’s government of pitfalls in raising fuel prices
Protest in a suburb of Tehran in March 2023
On the fifth anniversary of Iran’s 2019 bloody fuel price protests, three economists reviewed lessons for the current government and warned against a similar decision for yet another fuel price hike.
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The review follows a recent government decision in November to permit the import of high-octane gasoline, dubbed "super gasoline" by Iranians, to be sold at unsubsidized international prices—affordable only to the wealthiest citizens.
Critics have consistently warned the government that any increase in fuel prices will drive up the cost of all goods in Iran, including everyday staples, likely inciting widespread public anger and sparking street protests. During the 2019 protests, Reuters reported that as many as 1,500 people were killed by security forces.
The Iranian government heavily subsidizes gasoline and other fuels in addition to electricity. One gallon of gas is sold under 10 US cents. This policy cost the government more than $50 billion annually according to estimates.
Hossein Raghfar, a professor at Al-Zahra University in Tehran, told the reformist Jamaran News that the 2019 protests stemmed from years of accumulated pressure on millions of marginalized Iranian youths who saw no future for themselves. While these frustrations had been building, the gasoline price hike was the immediate trigger for the unrest.
Raghfar added that public trust in the government has steadily eroded since then, as repeated promises to resolve the ongoing economic crises have gone unfulfilled. He cautioned that under the current circumstances, any further increase in gasoline prices would likely harm everyone and exacerbate existing tensions.
Meanwhile, Jamaran News warned in a commentary that, despite the tragic events of 2019 that claimed many lives, some Iranian officials appear to have learned little from past protests and remain determined to raise fuel prices. Raghfar echoed this concern, stating it is evident that the Pezeshkian administration is set on increasing gasoline prices, seemingly indifferent to the potential economic and social upheaval it could cause.
Critics in Iran charge that by increasing the fuel prices, the government hopes to make up for the country's huge budget deficit. Raghfar pointed out that one of the reason for the budget deficit is that half of the country's foreign currency revenues never reach the government.
Without addressing the role of Khamenei's office in shaping major decisions in Iran, he noted that presidential administrations have historically had no influence over the country’s economic policies. These policies, he emphasized, are crafted by entities that bear no accountability for their outcomes.
Another economist, Jafar Kheirkhahan, acknowledged the need for a gasoline price hike but stressed that the public must first be convinced of its necessity. He argued that all those impacted by the increase should be included in the decision-making process. Reflecting on 2019, he criticized the government for implementing the price hike unilaterally, without consulting stakeholders.
On the other hand, Kheirkhahan emphasized that if the government’s reforms focus solely on fuel prices, they will yield no meaningful results. For the initiatives to succeed, the President must ensure that he fulfills his promises across various sectors. Kheirkhahan added that in achieving this, only Pezeshkian’s honesty and integrity can save him.
Kheirkhahan stressed that the government must change its approach, become more accountable, and stop burdening citizens with unnecessary regulations. He argued that the government needs to clearly explain how a fuel price increase will benefit the public. Without tangible benefits, he warned, people are likely to resist the government’s decisions.
Economist Hossein Rajabpour echoed these concerns, warning of the economic shock a fuel price hike could bring. He criticized the government for relying on quick fixes like fuel price increases rather than implementing meaningful reforms that could spur the country’s development. For instance, while the government recognizes the need to expand Tehran’s subway system from six to ten lines, it avoids tackling this complex but necessary project, opting instead for the simpler and faster solution of raising fuel prices.
Rajabpour also condemned the government’s failure to learn from past mistakes. He warned that not only is an abrupt fuel price hike unlikely to yield positive outcomes, but it is also poised to exacerbate the country’s existing economic and social challenges.
Iran’s military leaders ramped up their rhetoric against Israel on Thursday and promised retaliation for air strikes on the country last month even as the government said it was open to diplomacy over Iran' nuclear program.
The mixed messages show the contending goals of beleaguered civilian leaders eager to ease heavy international sanctions and an ascendant armed establishment dedicated to confronting Israel and the United States.
Iran would “choose the timing and nature of our response to the Zionist regime, and when the moment arrives, we will act without hesitation," Army Commander-in-Chief Abdolrahim Mousavi said. "Our response will be decisive and uncompromising.”
Other senior officials intensified their warnings. Islamic Revolutionary Guard Corps Chief Hossein Salami said Iran was determined to respond.
“Our eyes are fixed upon you, and we will fight to the very end. Retribution will come; we will respond with painful blows—just wait and see,” Salami warned.
His deputy, Ali Fadavi, said the showdown would pit justice against falsehood, vowing the world would soon “witness the complete downfall of the Zionist regime.”
The warnings underscore the sky-high tension between regional arch-foes Iran and Israel, even as Iran's civilian leaders told the visiting head of the International Atomic Energy Agency (IAEA) that it sought to negotiate over its disputed nuclear program.
In an escalating cycle of tit-for-tat attacks that began in April, Iran and Israel have increasingly targeted each other, with tensions reaching new heights.
Iran is now expected to retaliate following Israel’s latest move: a four-hour operation on October 26 that Israel reports significantly damaged Iran’s air defense systems.
Israel’s strike was itself a response to Iran’s October 1 missile barrage, which followed a series of high-profile assassinations attributed to Israel.
These killings included the leader of Hezbollah in Lebanon and a senior Hamas political figure within an IRGC compound in Tehran, an incident widely seen as a stark breach of Iranian security.
Meanwhile, the Iranian government has signaled its readiness for diplomatic engagement on its nuclear program.
On Wednesday, Rafael Grossi, Director General of the International Atomic Energy Agency (IAEA), arrived in Tehran to address international concerns over Iran’s nuclear activities.
“Iran is prepared to cooperate with the IAEA to clarify any supposed ambiguities,” President Masoud Pezeshkian assured Grossi, insisting on the “the peaceful nature of our nation’s nuclear activities.”
Foreign Minister Abbas Araghchi also highlighted Iran’s willingness to negotiate, saying, “We are ready to engage in talks based on our national interest and our inalienable rights, but we will not negotiate under pressure or intimidation.”
Following his meeting with Grossi, Araghchi reaffirmed Iran’s commitment to the Nuclear Non-Proliferation Treaty (NPT), adding, “Differences can be resolved through cooperation and dialogue.”
According to Reuters, Iran plans to send a message to European powers through Grossi, underscoring its determination to resolve the nuclear standoff with Western nations.
The suicide of 42-year-old journalist Kianoosh Sanjari on Wednesday has sent shockwaves through Iranian society, sparking outrage among many who hold the Islamic Republic directly responsible for his death.
In a tweet on Tuesday, Sanjari - who was also a former political prisoner - threatened to take his own life if authorities did not release four political prisoners he named by 7:00 pm the following day. Ahead of the deadline, he posted a photo from the top of a shopping complex in central Tehran and, in a subsequent post, expressed his determination to follow through with his decision.
“No one should be imprisoned for expressing their beliefs. My life will end after this tweet but let’s not forget that we die because of our love for life, not death. I hope that Iranians will awaken one day and overcome oppression,” he wrote.
Thousands tried to convince Sanjari in the comments to his tweets not to give up his life while some others mocked him and called him a coward for making what they said was only an empty threat.
Many activists said they attempted to contact him but received no response. Only Two reported visiting him at his home to prevent his suicide. They said his therapist came to meet him when they left Sanjari's house. They added that he later left with the therapist to continue their conversation.
Minutes after Sanjari’s last tweet, some activists announced in their X posts that he had jumped to his death from atop the building. Within minutes, two videos emerged on social media that showed a male victim on a wet pavement in central Tehran. One of the videos showed a woman and a man performing CPR to revive him. The victim was quickly identified as Sanjari in X posts.
Discussion of Sanjari’s suicide has overtaken the Persian-language social media, with most users condemning the Islamic Republic for driving Sanjari to take his own life.
Since 1999, when he was just seventeen, Sanjari was arrested nine times for his political activities and endured extended periods of solitary confinement in prison.
In 2019, he was transferred from prison to a psychiatric facility, where he later reported being repeatedly subjected to painful and debilitating electric shocks and injected with unknown substances.
His funeral will take place on Friday and a large turnout by mourners cannot be ruled out.
An official of Tehran Criminal Court, Mohammad Shahriari, told the media Thursday that the incident was being investigated as a suspicious death and that the police were reviewing CCTV footage from the building.
Shahriari also said that Sanjari’s unnamed therapist who was present at the scene told the authorities that she had spent time with Sanjari that day until a few minutes before the incident when he told her he had changed his mind about taking his life and parted ways.
According to Shahriari, the therapist became suspicious minutes later when Sanjari did not answer her call and returned to the compound to search for Sanjari with the help of the building’s security only to find that he had already jumped to his death.
The Iranian Supreme Leader’s special envoy traveled to Syria and is due to meet President Bashar al-Assad as their mutual foe Israel launched more air strikes on the capital Damascus.
Ali Larijani was meeting with the head of Syria's Supreme National Security Council when a nearby building was hit with three air strikes, according to an unconfirmed report by the Jamaran news website in Iran, which added that Larijani was unhurt.
Several people were killed and injured on Thursday in Israeli airstrikes targeting two residential buildings in the suburbs of Syria's capital, Damascus, according to the state news agency SANA.
Israel's military radio reported that the strikes targeted assets and the headquarters of the Palestinian militant group Islamic Jihad.
While Israel has conducted airstrikes on Iran-linked targets in Syria for years, it has significantly intensified these operations following the October 7 attack last year by the Palestinian group Hamas, which ignited the Gaza war.
Iran Supreme Leader Special Envoy Ali Larijani met with Speaker of the People's Assembly of Syria Hammouda Sabbagh on November 14, 2024.
Larijani held talks with Hammouda Sabbagh, the Speaker of the Syrian People's Assembly on Thursday afternoon but Iran’s foreign ministry gave no detailed explanation of the itinerary and goals of his trip.
Smoke rises as people gather at a damaged site after what Syrian state news agency said was an Israeli strike in Damascus suburb of Mazzeh, Syria November 14, 2024.
Now, operating outside Iran’s traditional diplomatic framework, his Syria visit may be a sign that Khamenei is again relying on direct emissaries to manage critical foreign policy matters.
Bashar al-Assad, whose government survived a rebellion beginning in 2011 largely due to Iranian military and financial backing, occupies a pivotal position in Tehran’s regional security calculus.
Syria’s geographic proximity to Israel and Lebanon makes it a key base for Iran's Lebanese ally Hezbollah in its conflict with Israel.
Over the past year, Israeli strikes have repeatedly targeted Iranian-linked forces and infrastructure in Syria, with high-ranking Iranian and Hezbollah commanders among those killed.
Although Assad has maintained close ties with Iran, he has occasionally distanced himself from Tehran’s broader regional conflicts. Notably, he has managed to mend relations with Saudi Arabia and rejoined the Arab League in 2023 after years of diplomatic isolation.
Assad’s restrained response to the recent escalation following Hamas’ October 7 attack on Israel suggests a cautious approach, even as Syria remains a key theater in Iran’s regional strategy.
The envoy’s meeting with Assad and other officials is being seen as part of Iran’s efforts to consolidate its position in Syria amid heightened regional tensions.
Iranian officials have repeatedly signaled plans for retaliation against Israel for its attack on Iran on October 26 but have refrained from detailing their timeline or approach.
In April and October 2024, Iran launched unprecedented missile attacks on Israel, with the October 1 assault involving around 200 ballistic missiles targeting military installations and urban centers, marking the largest direct attack by Iran on Israel.
These strikes were retaliatory responses to earlier Israeli operations, including airstrikes on Iranian-linked targets in Syria.
In response, on October 26 Israel launched a series of airstrikes against Iranian military assets, including missile facilities and Revolutionary Guard units, aiming to weaken Iran’s capabilities and deter further aggression.
This escalation marked a shift from proxy warfare to direct confrontation between the two nations.
Larijani's visit will mark his second meeting with Assad. The first occurred in February 2020, shortly after the assassination of Qassem Soleimani by US forces in Iraq, a trip that underscored his role as Khamenei’s trusted emissary during critical periods.
As the region braces for further developments, the visit signals Iran’s intent to strengthen its coordination with Syria and reassert its influence in the face of mounting challenges.
The escalators do not work. What works here is hijab enforcement. Welcome to Sadeqieh subway station in western Tehran! A link between the rest of the Iranian capital and its nearest densely populated suburb Karaj.
The loudspeaker says the next train to downtown Tehran does not stop here as it is fully packed. In less than a minute, passengers are forced to step back from the edge of the platform and watch a train with its doors open dashing away in high speed as passengers inside cling onto whatever that can help keep them on board. A subway train with doors malfunctioning is another sign of breakdown in public services.
The Kayhan newspaper, a hardline daily associated with the office of Supreme Leader Ali Khamenei, recently suggested that US President-elect Donald Trump should be assassinated, claiming that this would please Allah. Such statements are profoundly unacceptable by any standard. Yet, the government, which maintains tight control over domestic media, allows this newspaper to make threats against a foreign elected official.
The "reformist" press adopts a slightly more moderate tone. Etemad newspaper reported that 12 economists have advised President Masoud Pezeshkian to address the shortage of electricity and fuel by raising prices, suggesting that higher costs will lead to reduced demand. The suggestion comes as 40% annual inflation has impoverished one third of the population in the past five years.
Outside the station, traffic police stop women riding motorcycles. A 16th-century cleric, Mohammad Bagher Majlesi, known as Allamah, or “the most learned man” in Isfahan, issued a ruling in his interpretation of Shariah law that women should not sit on saddles, claiming they might experience unchaste sensations from the contact with the saddle. Confiscated motorcycles line the sidewalk, awaiting a male family member to come and collect them.
For many men and women, motorcycles are the most practical way to navigate Tehran’s heavy traffic. Women are allowed to ride as passengers, and Shariah law generally overlooks it when they hold onto the male driver’s waist for support. There are different rules for the driver’s seat and the passenger seat, as if there were two different Gods governing each position.
The government attempts to strictly enforce hijab regulations, at times using force, though many women continue to resist. The latest enforcement initiative is the Hijab Clinic, also called the “Clinic to Give Up Hijablessness.” The wording gives it the tone of a center for drug rehabilitation. An Iranian journalist commented on X: “This political system clings to absurd measures while grappling with multiple crises. Such a system is bound for decline; power, water, and gas shortages, along with the opening of hijab clinics, are signs of its collapse.”
Despite the government's strict stance on hijab, two of the most widely shared stories on social media this year involve scandals surrounding state officials and celebrities. While authorities say they made a few arrests in Rasht, related to a sex scandal caught on video, they have remained silent about another incriminating video involving the granddaughter of a Friday prayers Imam in a different city.
The government has attributed widespread power outages to its decision to halt the use of polluting fuels in power plants, yet residents continue to complain about the smog that settles over the city like a thick blanket. It was only after mounting criticism that Government Spokesperson Fatemeh Mohajerani acknowledged that some power plants are still burning mazut, one of the most harmful fuels available. An energy expert reports that Iran burned approximately 8.2 billion liters of mazut in urban areas last year. The reason: shortage of natural gas, when Iran has the world’s second-largest reserves.
Amid widespread public frustration over government inefficiency, viral photos have surfaced of five “apple polishers,” including two movie stars, a footballer, a TV presenter, and a wrestling coach, who continue to praise the government’s “achievements” in trivial areas or even compliment the President’s mannerisms. This seems to be a public tactic for naming and shaming those who turn a blind eye to the struggles of ordinary people.
Speaking of naming and shaming, one of the biggest stories circulating involves a whistleblower revealing financial corruption among several former officials, including two former heads of the Iranian Judiciary. Social media users have criticized state-controlled media for selectively covering these cases while omitting others implicated in significant corruption scandals, such as former Tehran mayors Mohammad Bagher Ghalibaf and Alireza Zakani, as well as the city's Friday prayer Imam, Kazem Sedighi.
It is these paradoxes and hypocrisies—scandals in a political system that prides itself on chastity, financial corruption in the world’s most prominent theocracy, and a ban on love and alcohol in a land whose literary heritage celebrates both—that led one of Iran’s most renowned contemporary poets, Ahmad Shamlou, to write: “These are strange days, my darling. They flag love at the crossroads, and they smell your mouth at checkpoints to make sure you have not said: I love you.”
Iranian foreign minister says that Tehran remains open to resolving differences over its nuclear program through dialogue and mutual cooperation, as the UN’s nuclear chief held talks in Tehran.
“Important and straightforward talks with DG @rafaelmgrossi this morning,” Araghchi wrote on X, referencing his meeting with IAEA Director General Rafael Grossi on Thursday. “Differences can be resolved through cooperation and dialogue. We agreed to proceed with courage and goodwill.” However, he added that Iran would not negotiate “under pressure and intimidation.”
President Masoud Pezeshkian said on Thursday that Tehran was prepared to cooperate with the UN nuclear watchdog IAEA to clear up "alleged ambiguities about the peaceful nuclear activity of our country", Iranian state media reported.
Grossi’s visit to Tehran, part of a high-level effort to de-escalate nuclear tensions, also included talks with Mohammad Eslami, head of Iran’s Atomic Energy Organization. IAEA's Board of Governors will hold its quarterly meeting next week, where Iran can face a resolution criticizing its lack of cooperation with the UN watchdog.
IAEA Chief holds talks with Mohammad Eslami, Head of the Atomic Energy Organization of Iran, on November 11, 2024 in Tehran.
In a joint press conference, Eslami warned of immediate reciprocal actions should the IAEA Board of Governors issue a resolution targeting Iran's nuclear program.
“We have repeatedly announced that any interventionist resolution regarding Iran’s nuclear affairs will undoubtedly face immediate actions,” Eslami said. “We will not allow pressure to dictate the course of our peaceful nuclear activities.”
Later on Thursday, Tehran media reported that Grossi will visit nuclear facilities in Fordow and Natanz tomorrow. According to these reports, he described this visit as very important, emphasizing that it could provide him with an accurate assessment of the quality and scale of Iran's nuclear program. This marks a shift in his approach, as he did not inspect any facilities during his previous visit to Iran.
Reuters quoted some diplomats on Tuesday that European powers are advocating for a new resolution against Iran at the UN atomic watchdog's board meeting next week to pressure Tehran over its lack of cooperation.
"Our concerns about Iranian nuclear activity are well known. It feels a natural point to be asking the IAEA for a thorough report. That then provides a basis to deal with Iranian behavior," a European diplomat said.
Eslami; however, described Iran’s engagement with the IAEA as continuous and constructive. “These actions tarnish the credibility of international organizations,” he said. “The United Nations and its affiliated bodies must fulfill their responsibilities in addressing these issues.”
IAEA Chief Rafael Grossi and Iran's Nuclear Chief Mohammad Eslami during a press conference in Tehran on November 14, 2024.
Grossi, addressing transparency and oversight concerns, touched upon the importance of IAEA verification, which he said requires a clear framework. He said there must be a comprehensive basis for the activities, including a detailed list of nuclear materials and clarity on capabilities, adding that this applies not only to Iran but to all nations.
On the potential for military attacks on nuclear facilities, Grossi warned of severe consequences. “Such attacks could have very serious radiological consequences,” he said. “The IAEA and its member states have previously expressed strong opposition to such actions.”
Grossi emphasized the need for tangible progress, saying, “It is indispensable to get at this point in time to some concrete, tangible, visible results that will indicate that this joint work is improving the situation and bringing clarification to things and in a general sense is moving us away from conflict and ultimately war.”
Iran's uranium enrichment machines called centrifuges
Grossi’s visit follows his earlier warnings that diplomatic avenues to resolve Iran’s nuclear activities are narrowing. Speaking at the COP29 climate summit in Baku, he urged Iran to enhance transparency, saying, “We need to find ways of giving the agency more visibility.”
The visit comes after weeks of tensions in the region, particularly between Iran and Israel. Ahead of his trip, Grossi told AFP, “The Iranian administration must understand that the international situation is becoming increasingly tense and that it is imperative to find ways to reach diplomatic solutions.”
Meanwhile, Israel has expressed alarm over Iran’s nuclear progress, as has the international community. Donald Trump's election has added further uncertainty to the future of the 2015 nuclear deal. Trump’s 2018 withdrawal from the accord unraveled its framework, despite subsequent efforts to revive it. Grossi has described the accord as an “empty shell,” calling for a new framework to address the current challenges.
The 2015 Joint Comprehensive Plan of Action (JCPOA), brokered between Iran and six world powers, sought to limit Iran’s nuclear activities in exchange for sanctions relief. However, in the absence of a binding agreement, Iran’s nuclear program has significantly expanded.
According to the IAEA, Tehran’s enriched uranium stockpile has grown, with enrichment levels reaching 60%—approaching the 90% threshold required for weaponization. While Tehran denies any intention of developing nuclear weapons, the expanded program has fueled international concerns.