Iran raises gasoline prices for the first time since deadly 2019
protests
[December 13, 2025] By
NASSER KARIMI and JON GAMBRELL
TEHRAN, Iran (AP) — Iran introduced a new pricing tier Saturday for its
nationally subsidized gasoline, attempting to rein in spiraling costs
for the first time since a price hike in 2019 that sparked nationwide
protests and a crackdown that reportedly killed over 300 people.
Cheap gasoline has been viewed for generations as a birthright in Iran,
sparking mass demonstrations as far back as 1964 when a price increase
forced the shah to put military vehicles on the streets to replace those
of striking taxi drivers.
But Iran’s theocracy faces a growing squeeze from the country’s rapidly
depreciating rial currency and economic sanctions imposed due to
Tehran’s nuclear program.
That has made the cost of having some of the world’s cheapest gasoline
at a few pennies per gallon that much more expensive. However, the
government’s hesitant move toward increasing prices likely signals it
wants to avoid any confrontation with the nation’s exhausted public
after Israel launched a 12-day war on the country in June.
“Our discontent has no result,” fumed Saeed Mohammadi, a teacher who
works as a taxi driver in his spare time to make ends meet. “The
government does whatever it likes. They don’t ask people if they agree
or not.”
New rate is still pennies per gallon
At four gas stations in northern Tehran on Saturday morning, drivers
seemed relaxed as they refueled in clear, cold weather. Single police
vehicles were stationed nearby at times, but there were no long lines at
the pumps or other visible problems.
The new pricing system implemented Saturday adds a third pricing level
to the country’s long-running subsidy system. The revised structure
allows motorists to continue receiving 60 liters (15 gallons) per month
at the subsidized rate of 15,000 rials per liter, or 1.25 U.S. cents,
and the next 100 liters (26 gallons) will remain at 30,000 rials a
liter, or 2.5 cents.
Anything purchased beyond that falls under the new pricing scheme of
50,000 rials per liter, or about 4 cents. Iran introduced fuel rationing
back in 2007, but that has yet to ease demand for the ultracheap
gasoline.
Even at that new rate, Iranian gasoline prices remain among the lowest
in the world.
The difference between the cost of production and delivering the fuel
and the price at the pump is the subsidy paid by Iran’s government. The
Paris-based International Energy Agency ranked Iran as paying the
world’s second-highest energy subsidy costs in 2022, behind only Russia.
The IEA put Iran’s oil subsidies at $52 billion that year, with Iranian
officials acknowledging tens of billions of dollars a year go toward
artificially keeping energy prices low.
[to top of second column] |
 Tehran-based economist Hossein
Raghfar said that since 2009, the price of gasoline has grown
15-fold, offering a pessimistic view of the government’s subsidies.
”Not only did it fail in lessening the budget deficit, but it also
trapped the country’s economy in a negative loop of inflation and
budget deficit,” he said.
Hamid Rezapour, a 35-year-old bank teller, said he believed Iran’s
government had “no choice except to increase the price to manage the
country’s economy.”
“It needs more money to pay for public needs.” he said. “To me, it
is an indirect tax though in a messy economy it barely works.”
First hike since 2019 protests
The move is the most significant change to Iran’s fuel-subsidy
system since 2019, when a sudden 50% jump in subsidized prices and a
300% increase in the rate for purchases beyond quota sparked
nationwide protests.
Security forces cracked down on demonstrations across 100 cities and
towns, with some protesters burning down gas stations and banks. The
crackdown that followed killed at least 321 people, according to
Amnesty International. Thousands were detained.
Critics say every single 10,000-rial increase in gasoline prices
will lead to as much as a 5% increase in inflation. Currently, the
nation is struggling with an annual inflation rate of some 40%.
But cheap gas provides an opportunity for employment for the
country. There are 25 million vehicles, including 3 million public
and government-affiliated cars, as well as 6 million motorbikes in
the Islamic Republic. Reportedly, more than 8 million Iranians work
as taxi drivers through online platforms, nearly 10% of the
population. Uber, meanwhile, has 8.8 million drivers and couriers
worldwide.
“It is a start for amending the trend of fuel consumption,” Oil
Minister Mohsen Paknejad earlier told journalists.
Officials’ comments suggest Iran may seek steeper price increases in
the future, as the government reviews prices every three months.
Mohammad Reza Assadi, a 60-year-old taxi driver, offered skepticism
that any further protest would make a change.
People have poured into the streets over hikes in the gasoline price
in the past, he said, “but they returned home tired and hopeless
later at dusk.”
___
Gambrell reported from Dubai, United Arab Emirates. Amir Vahdat in
Tehran, Iran, contributed to this report.
All contents © copyright 2025 Associated Press. All rights reserved |
