Iran Economy News Impact of Gasoline Price Hike on Commodity Prices in...

Impact of Gasoline Price Hike on Commodity Prices in Iran


gasoline price hike impacts Iran's economy

By Jubin Katiraie

Less than a month has passed since gasoline prices in Iran were tripled. At the same time, the government started a parallel propaganda campaign in its media. That with gasoline rising and quotas, “the price of the rest of the commodities would not rise, and the government would deal with offenders [who raise prices].”

Now only weeks after the gasoline price hike that led to the nationwide protests, the exact opposite has proven true, with the price of other commodities continuing to rise and making a life for the impoverished people worse than before.

The Influence of Gasoline price hike on Transportation Workers in Tehran

Due to the failing nature of the economy in Iran under the failed economic policies, there is no room for production and industry for Iranian workers to earn something, so many are working as transporters and taxi drivers, for which they have to use worn-out cars or motorcycles.

According to the state-run ILNA news agency, there are 300,000 ride-hailing drivers and the other 300,000 are personal taxi drivers nationwide which are using their private cars as taxis to support their families financially. Also, in the most optimistic view from the 3.5 million motorcycle owners in Tehran, more than 600,000 of these people only earn their money by working as transporters with their motorcycles.

In these two cases alone, more than 1.1 million people in Tehran alone have jobs that are directly dependent on gasoline, none of them has been given the minimum 15000 rials of gasoline quota.

Impact of the gasoline price hike on housing

While the government has always emphasized that raising gasoline prices would have no effect on economic markets, prices in the housing market speak differently. In one instance, the price of Mehr housing in Pardis in Tehran has risen from 20 to 50 million tomans in the weeks following the gas price hike in November.

Impact of the gasoline price hike on transportation pickup fare

Also, in recent weeks, government media have acknowledged that “after the price of gasoline has risen, the rental rate for pickup trucks transporting goods has increased by at least 70 percent and in some cases by up to 100 percent.” One does not need to be an expert to understand that increasing the transportation cost of any commodity will ultimately lead to an increase in the cost of that commodity to the consumer.

The influence of gasoline price hike on fruits and vegetables

The rising cost of transport fares can be seen in the rise in prices for most fruits and vegetables. In the past few days, government media have reported that “fruit prices have increased by 5,000 to 10,000 rials and tomatoes have gone from 100,000 rials to a record of 170,000 rials.”

The country’s statistics center said: “Average tomato prices in November of this year has grown by 55.5 percent compared to October.”

Impact of the gasoline price hike on spare parts

Spare parts have also not been an exception from the rising cost of gasoline, with high-end items including cylinder heads, gasket washers, clutch plate discs and other high-end components witnessing a 10 to 15 percent increase in prices. For example, car clutch plate discs have gone from a price of 8.5 million rials to 10 million rials.

November inflation rate

Now, if, in addition to the impact of rising gasoline prices on goods and services, the current rate of inflation is on the rise, consumers in Iran will have next to zero purchasing power. According to official government sources, November’s inflation rate was 41 percent and the annual inflation is at 32 percent.

The impoverished society took to the streets in the days following 15 November, when they saw this staggering clarity that the prices would be increasing, but the government responded with bullets. Inflation and prices are on the rise, and the impoverished class war with the rulers will not subside.


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