Subsidy cuts cause Iran fuel prices to soar

Subsidy cuts cause Iran fuel prices to soar
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Fuel prices in Iran have been put up by up to 75 percent overnight, as the government seeks to cut subsidies.

It comes on top of recent hikes in gas and electricity prices.

Iranians rushed to fill up their cars before the rises took effect, but there were no immediate reports of unrest, unlike in 2007 when there were riots at some service stations when cheap fuel was rationed for the first time.

Even with the increase, fuel in Iran is still among the cheapest in the world.

The price of semi-subsidised petrol, to which Iranians are entitled to 60 litres per month, has risen from 4,000 to 7,000 rials (0.20 euro cents) per litre.

The price of petrol sold independently of that ration has gone up from 7,000 to 10,000 rials (0.28 euro cents) per litre.

The Interior Minister Abdolreza Rahmani Fazli has been quoted as saying the hike was not expected to make people angry.

But one taxi driver interviewed in Tehran was annoyed: “They should give us petrol subsidies, and cut those for private cars. The price (of petrol) should even be doubled or tripled – but only for private cars not taxis. We are serving people and society.”

“I think we should consume less. Many people drive private cars for work and pleasure. I think we should use public transport more often – but the authorities should boost services,” was the view of another Tehran resident.

The official aim of the subsidy cuts is to divert resources into helping combat Iran’s high levels of unemployment.

The price rises are expected to dent efforts to bring down inflation, but the government hopes overall to improve an economy buffeted by Western sanctions.

President Rohani is currently negotiating the easing of those sanctions in exchange for reining in Iran’s controversial nuclear programme.

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