Iran’s President, Masoud Pezeshkian, recently acknowledged the lack of logic in the country’s fuel subsidies, highlighting the disparity between purchasing petrol at a free-market dollar rate and selling it at a heavily subsidized price to the public. Amidst growing discontent over the government’s long-standing policy, Pezeshkian called upon scientists and economists to address the issue.
The debate over fuel prices in Iran, one of the top global oil producers, has been ongoing, with a significant price increase in 2019 resulting in widespread protests. Despite concerns raised by his opponents during the campaign trail, Pezeshkian’s Oil Minister, Mohsen Paknezhad, announced that the government was not considering immediate price solutions to address the petrol disequilibrium.
Critics argue that the current low petrol prices, at 30,000 rials per liter, are economically unsustainable and divert essential public funds from areas like pension payments and wheat purchases. With Iran facing economic challenges due to years of Western sanctions, the government’s approach to fuel subsidies remains a contentious issue.
As Iran grapples with economic pressures and political uncertainties, the future of its fuel subsidy policy continues to be a topic of intense debate among policymakers, economists, and the general population.
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