Iran petrol price hike: Protests erupt over surprise rationing

Cars queue at a petrol station in Tehran on 15 November 2019

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Cars could be seen queuing at a petrol station in Tehran on Friday

Protests have erupted across Iran after the government unexpectedly announced it was rationing petrol and increasing its price, state media report.

Prices went up by at least 50% on Friday.

The authorities have reduced heavy subsidies on petrol prices to curb the impact of US sanctions which have badly affected Iran’s economy.

Iran faces stiff sanctions on oil exports after the US pulled out of a nuclear deal with world powers in 2018.

State news agency IRNA reported “severe” protests in Sirjan, central Iran, on Friday night as “people attacked a fuel storage warehouse in the city and tried to set fire to it”.

Police intervened to disperse them, it says.

Protests also broke out in other cities including Mashhad, Birjand, Ahvaz, Gachsaran, Abadan, Khoramshahr, Mahshahr, Shiraz and Bandar Abbas, it added.

In Mashhad, Iran’s second largest city, dozens of angry demonstrators blocked roads by abandoning their cars in traffic, AP news agency reported citing Iranian state media.

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Media captionFeeling the squeeze: Iran sanctions explained

Under the new measures, each motorist is allowed to buy 60 litres (13 gallons) of petrol a month at 15,000 rials ($0.13; £0.10) a litre. Each additional litre then costs 30,000 rials.

Previously, drivers were allowed up to 250 litres at 10,000 rials per litre, AP reported.

The revenues gained from removing subsidies on petrol will be used for cash payments to low-income households, the government says.

The head of the Iranian Planning and Budget Organisation, Mohammad Baqer Nobakht, said that from this month, 18 million families would get an extra cash allowance as a result of the price increase.

The new measure is expected to bring in 300tn rials per annum, he said on state television.

President Hassan Rouhani said on Saturday that 75% of Iranians were currently “under pressure” and the extra revenues from the petrol price hike would go to them and not the treasury, AFP news agency reports.

Cheap fuel

Iran has some of the world’s cheapest fuel prices due to heavy subsidies and the fall in value of its currency.

It is also one of the world’s largest oil producers, with exports worth billions of dollars each year.

US President Donald Trump reinstated the sanctions against Iran last year after abandoning the landmark 2015 nuclear deal between Iran and six world powers.

Under the accord, Iran agreed to limit its controversial nuclear activities and allow in international inspectors in return for sanctions relief.

The sanctions have led to a sharp downturn in Iran’s economy, pushing the value of its currency to record lows, quadrupling its annual inflation rate, driving away foreign investors and triggering protests.

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