Jahangiri: Increasing Gasoline Prices is Not Feasible, Society Cannot Bear It

Iran's First Vice President announced that increasing gasoline prices is currently not feasible and that "society cannot bear it." According to ISNA and Tasnim news agencies, Eshaq Jahangiri said on Sunday, October 21, regarding the increase in gasoline prices: "We must advance policies step by step, and we cannot suddenly move from an economy with subsidies to a free economy given our current conditions; rather, we need a managed policy to move in this direction according to societal conditions." Following the protests in December 2017, the Iranian parliament opposed the increase in energy prices. However, the struggle over increasing energy carrier prices in Iran has entered a new phase due to the rise in fuel smuggling from the country, coinciding with the fall in the value of the rial. Although the parliament rejected the government's proposal to increase energy carrier prices in the 2018 budget bill, the Sixth Development Plan has allowed the government to increase these prices. Government officials had previously stated that with a 500 tomans increase in gasoline prices, they intend to spend the 17 trillion tomans in revenue from this increase on improving dilapidated areas, modernizing public transportation, and developing employment. Critics of the government accuse Hassan Rouhani of being inclined to increase gasoline prices while being indifferent to the rise in diesel prices following this decision and its direct impact on citizens' livelihoods and the prices of various goods and services. Some parliament representatives also say that the Rouhani government views collecting taxes from gasoline sales as a reliable financial source for funding its projects, even though people cannot bear an increase in gasoline prices under the current economic conditions. Several experts also state that the natural decrease in demand following the increase in supply prices of this product will lead to another factor: "popular protests." Jahangiri also referred to the impact of U.S. sanctions, stating: "Due to these pressures, some countries have surrendered and reduced their oil imports from Iran to zero, while others have continued to import oil from Iran. We have also found several new oil partners." He added: "In the government, we have found solutions to export our oil against the wishes of the Americans, to conduct our activities in transportation, to establish our financial transactions, and to achieve our desired goals in other areas." On September 10, Jahangiri acknowledged that U.S. sanctions have had a "very significant" impact, stating that the country's situation is "difficult and critical," but "not a dead end." Last month, Federica Mogherini, the EU's foreign policy chief, announced that the EU's new financial mechanism, known as the "SPV," will be implemented in November to allow the EU to maintain trade and financial relations with Tehran despite Washington's sanctions. The main goal of this mechanism is to neutralize U.S. actions in punishing banks that continue to assist Iran's oil transactions.