Lines Form at Gas Stations in Tehran. The Government Is Postponing Price Hikes; in 2019 They Were Followed by Protests

Lines formed in front of gas stations in Tehran on Tuesday. Drivers were topping up their tanks before running out of fuel, and attendants, according to The Irish Times, were limiting them to twenty liters per car. Iran is short roughly fourteen to fifteen million liters of gasoline a day out of consumption of around 135 million, and imports, which had covered this gap for years, have, according to Iranian officials, practically stopped because of the war and the American naval blockade. The fastest solution would be to raise the price of the cheapest gasoline in the world. At the same time, it is exactly the kind of intervention in prices that triggered deadly protests in Iran in 2019 — and today this overlaps with the fresh trauma of the January repression.

What Is Visible on the Street

Iran’s Energy Consumption Optimization Organization, the state authority responsible for fuels, described the shortfall as critical. One gas station employee in the capital said that people are filling up “even before they have an empty tank, because they fear the war will start again or prices will rise.” The Irish Times ↗

Greece’s Naftemporiki and Protothema presented the same picture through AFP, which spoke with people in the lines. “Sanctions of course affect people’s lives, citizens are suffering,” said 55-year-old real estate broker Mehdí Jazdján from northern Tehran, but added that “our nation is strong, these sanctions have been going on for 47 years.” The 45-year-old English teacher Kia Faraháni saw it differently: “We Iranians are not afraid of war, but I think this war will be mainly economic, it will put great pressure on the population and perhaps there will again be unrest.” Naftemporiki ↗ Protothema ↗

Why Gasoline in Iran Is a Political Price

Iran is a major oil exporter that also imports gasoline because it lacks refining capacity — and part of the capacity it had, according to Iranian officials, was destroyed by American and Israeli bombing in the first weeks of the war. Subsidies keep the price at an almost symbolic level. The cheapest tier costs 15,000 rials per liter with a monthly quota of sixty liters, the second 30,000 rials with the quota reduced from one hundred to fifty liters, and the third 50,000 rials. An entirely new tier at 872,000 rials, or about 44 cents, is also under consideration. Al Jazeera ↗

The president himself named the gap between the purchase and sale price. “Who said the government should buy gasoline for 1.3 million rials per liter and then sell it for 15,000?” Masúd Pezeškian asked. His chief of staff Mohsen Hádží-Mirzaeí confirmed on Monday that quotas will be reduced, but that no decision has been made on price because there are “uncertainties regarding the social, economic and security consequences.” First Vice President Mohammad Réza Aref at the same time insists that the cheapest tier must remain. The Irish Times ↗

The caution has a concrete reason. The government stopped a pilot price-increase project in Kerman province this month just hours after launching it. In 2019, an overnight price increase led to protests that the regime suppressed by force. And the protest wave that began on December 28 after the currency’s collapse and culminated on January 8 and 9 was, according to Human Rights Watch and Amnesty International, one of the bloodiest crackdowns on demonstrators in modern Iranian history. Human Rights Watch ↗ UK Home Office ↗

The pressure on wallets is stronger than ever before. On Monday, the rial fell to two million per dollar from 1.53 million at the beginning of March, Iran’s statistics office reported year-on-year inflation of 88 percent for July and more than 128 percent for food. Time ↗

What Really Applies from the “Economic D-Day”

Scott Bessent named the new approach Operation Economic Outcast. The Treasury Department sanctioned almost sixty entities, individuals and vessels, and expanded sanctionable sectors to include digital assets, technology, gold, aviation and shipping. According to Bessent, every country is to receive a deadline to end trade with Iran, otherwise it faces secondary sanctions — but Washington has not published specific deadlines or a list of countries. The declared goal is not the price of gasoline in Tehran, but to cut the regime off from revenues and force it into concessions. NPR ↗ Al Jazeera ↗

That very vagueness is why European commentators speak of a weaker blow than the announcement made it appear. Austria’s Die Presse writes that the measures will probably not achieve the goal of economic isolation, but they may deepen the crisis in the country. France’s RFI sees in the timing an “admission of weakness” in the face of a military stalemate, Spain’s El Español writes that Washington reduced the announced “economic D-Day” to a warning for China and other partners, and Germany’s Handelsblatt summarized that only vague threats remained from the major American announcements. Die Presse ↗ RFI ↗ El Español ↗ Handelsblatt ↗

Whether it works will be decided by Beijing, which, according to available estimates, takes more than 80 percent of Iran’s oil exports. Chinese Foreign Ministry spokesman Lin Ťien said that maximum pressure within an economic war does not solve problems but escalates tensions and destabilizes the global financial order, and that China will take “all necessary measures” to defend its interests. Tehran responded in the same tone — Economy Minister Alí Madanízádeh predicted on state television “another defeat” for Washington and spoke of a two-year plan to manage the sanctions, the details of which he did not provide. Chief negotiator Mohammad Bagher Ghalibaf wrote that “the Americans know that no one believes their big-mouthed talk.” Naftemporiki ↗ To Vima ↗

Where the Same War Touches Europe

The lines in Tehran have their European equivalent in price tags. Spain’s industrial producer price index rose by 9.2 percent year on year in July, while consumer prices rose by only 3.6 — from this difference the newspaper ABC concludes that companies have so far absorbed most of the increase in costs, and warns of a slower but recognizable version of the 2022 crisis. In Italy, meanwhile, gasoline climbed to 2.015 euros per liter and diesel to 2.136, and Croatia’s N1, in a commentary, linked the fuel price increase directly to the American “D-Day” against Iran. ABC ↗ ANSA ↗ N1 Croatia ↗

The Limits of This View

Reporting from the Iranian street is produced in a country with limited press freedom, so statements from lines in front of gas stations are a sample, not a measurement. Fuel and inflation figures come from Iranian state institutions and cannot be independently verified, although the direction they indicate is also confirmed by the rial’s free-market exchange rate. The balance of the January protests must be read most cautiously: the Iranian government reported 3,117 dead, the American agency HRANA documented more than seven thousand dead, and estimates from medical sources cited by Western media reached as high as tens of thousands. From such a range, no single number can be inferred, only that it was an exceptionally bloody crackdown.

The European newsrooms on which this text relies also have their own perspective. Die Presse, Handelsblatt and El Español write from the position of economies that lose from high energy prices, so their skepticism toward the American approach also follows from their own interest. By contrast, they know little about the internal dynamics of the Iranian regime — none of those cited can say whether Tehran’s two-year plan is realistic or just rhetoric.

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