Whispers of Gasoline Price Increase; An Economist: You Can't Pay Salaries in Rials and Sell Gasoline in Dollars

An economics professor identified scientific inflation control as a way out of the current economic deadlock for the government, labeling the increase in gasoline prices as futile and a trap in the inflationary cycle. Vahid Shaghaghi commented on the whispers of gasoline price increases to the website 'Faraz', stating that various governments have long used the mechanism of justifying smuggling to raise gasoline prices. According to this economics professor, preventing smuggling has its own solutions, and increasing energy prices has neither reduced smuggling nor solved any other problems. Shaghaghi emphasized that altering energy prices without structural reforms would bring another inflationary shock, and one cannot pay people in rials while selling gasoline in dollars. He believes that if the government cannot control inflation and reduce it to the global average of 4 to 5 percent, increasing energy prices will have no effect. The online newspaper Faraz reported on the margins surrounding gasoline, noting that while rumors of a gasoline price increase have been circulating in some media, Ahmad Vahidi, the Minister of Interior, denied these rumors, stating that 'the government has no plans to increase gasoline prices.' According to this report, the increase in gasoline prices was raised last year but faced backlash from representatives and government officials. In this context, Malek Shariati, spokesperson for the Energy Commission of the Islamic Consultative Assembly, emphasized on February 17 that the government’s quota of 1,500 tomans for gasoline and the 3,000 tomans free quota would remain unchanged next year. The plan to allocate gasoline to all households is still being pursued in the parliament. Although details have not been published, experts believe that allocating gasoline to bank cards and reforming the gasoline distribution system is a precursor to implementing the plan to eliminate fuel subsidies. In recent months, the distribution of three-tiered gasoline in Urmia and the collection of fuel cards from gas station owners have been on the agenda. In this regard, on July 7, the head of the fuel station owners' guild announced a new era of fuel supply in Iran, stating that fuel quotas would be offered using bank cards. Asadollah Gholizadeh told ILNA news agency that 'we do not need to use a separate card for fuel subsidies.' Although all relevant and irrelevant government officials have denied any changes to quotas and prices, the trend of events in this area indicates a move towards fundamental changes. On the other hand, due to the budget deficit of the seventh development plan, which Minister of Economy Khandozi has estimated to be close to 1,200 trillion tomans, the government has no choice but to increase gasoline prices. It seems that the economic and social repercussions of the gasoline price increase in 2019 and the widespread protests last year are among the reasons for the government's hesitation in this regard. The increase in gasoline consumption in Iran; whispers of importing gasoline from Russia at a higher price than the global price. The government's push for a fuel price increase; Shargh newspaper: gasoline consumption statistics have 'disappeared'. The thirteenth government's determination to increase gasoline prices; the gasoline pot has hit the bottom. Media whispers about gasoline becoming more expensive; producing gasoline domestically is not cost-effective.