Hemati Says Society Cannot Endure Shock from Gas Price Increase

The Minister of Economic Affairs and Finance has stated that Iranian society cannot tolerate any "shock-inducing" economic actions regarding gas prices and that the basic goods basket of the people should not be harmed. Abdolnaser Hemati, on the evening of September 9, discussed energy imbalance and the government's decision on gasoline in a special news program, saying: "In this regard, good discussions are being held at the expert level, including whether if our gasoline is calculated at international rates, will you sell cars at international prices too? Are our cars fuel-efficient? Do people have purchasing power?" He called for all factors to be considered in decision-making regarding gas price increases. Hemati's position on gas prices comes at a time when recent statements by Masoud Pezeshkian regarding the "irrationality" of importing gasoline and selling it cheaply to the public have heightened public sensitivity about the government's potential actions in this area and the inflation wave that may result. The last time gas prices increased in Iran was in November 2019 during Hassan Rouhani's second administration, which led to widespread public protests and their bloody suppression by the Islamic Republic. Hemati, referring to "fourteen major economic challenges," reminded that decisions and actions must yield results in four macro variables including "controlling inflation and economic stability, high economic growth, equitable income distribution, and alleviating poverty and reducing unemployment," adding: "If our efforts in the economy do not achieve these four results, they are practically useless." The Minister of Economy considered the difference between official and free currency rates as one of the examples of incorrect economic governance. He announced that the rent distributed due to the currency rate difference in the country was "1.7 trillion tomans" and said: "In fact, we have given away a rent equivalent to one year's total national budget." Pezeshkian stated that gasoline should not be bought at high prices and sold cheaply to the public. Some of Hemati's statements regarding inflation and unemployment faced harsh reactions from conservative media. In his interview on Friday night, Hemati rejected claims about the desirability of the economic situation under Ebrahim Raisi's government, stating: "Some friends say we handed over a saddled horse to this government; what saddled horse? We have forty percent inflation, sixty thousand toman exchange rate, a twenty to thirty percent budget deficit, twelve to thirteen percent unemployment rate, and 4.5 percent economic growth." Hemati referred to a report published by Kayhan newspaper titled "The Saddled Horse Under the Fourteenth Government" on July 9, 2024, which claimed that the fourteenth government took over the country in a much improved condition compared to the "disastrous conditions" handed over to the thirteenth government in August 2021. The price of food in Iran has increased "almost threefold" in three years. The Tasnim news agency, close to the Revolutionary Guards, warned Hemati not to question "official statistics" in response to his statements about inflation rates. While Hemati announced the inflation rate as forty percent, Tasnim reported: "According to the latest inflation statistics officially published by the Central Bank, the fourteenth government received inflation at a rate of 31 percent from the thirteenth government." Hemati's statements regarding the unemployment rate have also sparked reactions. The Minister of Economy stated: "The unemployment rate announced as seven percent is not correct because the participation rate has not been considered." He explained: "Many people have lost hope of finding work and are not part of the active population for economic participation; since 2019, only four hundred thousand people have been added to the country's employment." Tasnim responded to Hemati's claim, stating: "Contrary to Hemati's statements, the current unemployment rate is 7.7 percent while he mentioned it as twelve to thirteen percent." Fars news agency, another media outlet close to the Revolutionary Guards, published a harsh note in response to Hemati's statements, declaring: "Hemati has set a record for the speed of lying." These reactions come at a time when the Statistical Center and the Central Bank had suspended the publication of inflation rate statistics for several months during the thirteenth government.