Iran readies major fuel price hike amid US sanctions and war pressures

Tehran is preparing the public for a sharp rise in gasoline prices as subsidies strain the state budget under US-imposed port blockades and a six-month war with Israel. President Masoud Pezeshkian blamed hostile forces for the economic squeeze, noting the rial’s plunge to a record low after former US President Donald Trump’s threat of a severe economic operation. Fuel subsidies currently range from 15,000 to 50,000 rials per litre, with strict monthly quotas enforced through fuel cards.

Energy chief Esmail Saghab-Esfahani outlined three possible paths: a first-come-first-served shutdown of stations, a modest universal allocation of 30 litres at the cheapest rate, or a full liberalisation to about 872,000 rials per litre, which could trigger inflation. A pilot price increase in Kerman was aborted, but the government signalled that higher rates are imminent, while First Vice President Mohammad-Reza Aref pledged to keep the cheapest tier intact and direct any proceeds to vulnerable groups.