One of the key topics that Iranian regime officials are currently discussing is the country’s high gasoline prices.
The simplest question that comes to mind is whether gasoline will become more expensive or not? To address this topic, we must first examine the macroeconomic conditions of the regime’s government under the tenure of its President Ebrahim Raisi.
Gasoline prices: One of the regime’s tools to compensate the budget deficit
According to a March 4 report by the Khabar Online daily, Mohsen Pirhadi, a member of the regime Majlis (Parliament), said the deficit of the budget bill stands at 4,760 trillion rials (approximately $9.2 billion). However, in an interview some time back, an economic expert associated to the regime’s apparatus estimated that the structural deficit of the mullahs’ budget as far higher.
In Iran’s faltering economy, not only are the nation’s resources and wealth being auctioned off, but the burden of covering the budget deficit also falls on the Iranian people.
One of the underlying factors contributing to this issue is the price hikes of gasoline, gas, water, and electricity. Although the imposition of fines on individuals and trade unions for various reasons, such as women not abiding by the regime’s strict hijab regulations, also play a minor role in compensating the budget deficit.
The price of energy carriers has a direct impact on various trades, jobs, and people’s daily lives. Therefore, any increase or stability in energy prices can significantly affect production and service costs as well as daily expenses.
Gasoline, from problem to crisis
For a long time, there have been many reports on increasing gasoline consumption in Iran. Statistics provided by various study centers show that in 2022, the country’s daily gasoline consumption reached nearly 13 million liters more than Iran’s domestic production. Since the regime has no proper plan and investment to reform the production systems and optimize domestic refineries, the regime is compelled to import gasoline and allocate a budget for this issue.
Although importing gasoline is embarrassing for a country with such vast natural resources the world’s fourth largest crude oil reserves, the bigger problem is that the imported gasoline is smuggled by different regime entities.
The regime claims around 50 million liters of gasoline are being smuggled on a daily basis. An April 18 report by the official Etemad daily provided the following description of the statistics: “The country’s total daily gasoline production is slightly more than 100 million liters. The daily diesel production is 110 million liters. How can one believes that 25 percent of the diesel and gasoline produced inside the country is smuggled?”
This newspaper further explains that for such a large transfer, more than 1,500 high-capacity oil tankers or 100,000 trucks with a capacity of 500 liters must cross the country’s borders every day.
Therefore, if such a high volume of gasoline is being smuggled from Iran each and every day, it must be through secret pipelines, meaning regime-linked entities are involved.
Aside from various statistics and lies fed to the media by different regime officials, the solution to this crisis lies in the optimization of refineries and updating the country’s production line of low-quality and high consumption cars. However, the regime is only looking for more money and not long-term investments which they don’t benefit from.
Inevitable gasoline price hike and Khamenei’s red line
Over the years, experience shows that regime Supreme Leader Ali Khamenei is not concerned about rising prices, has no intention of addressing the issue of resources being smuggled, nor the diversion of funds. In fact, he and his government entities and foundations in the IRGC are responsible for skyrocketing prices and rampant smuggling.
The increase in the price of gasoline does not need to be speculated and will happen sooner or later.
In this regard, while covering the denials of various officials, state media in Iran are finally acknowledging that the regime has no solution other than another gasoline price hike. However, state media are warning that the officials involved should do this with control to prevent another social uprising as witnessed in November 2019 following a three-fold increase in gasoline prices.
In November 2019, Iran witnessed a widespread uprising that shook the regime’s foundations. As a result, authorities are extremely concerned about increasing the price of gasoline yet again and its likely consequences.
Protests across Iran erupted on November 15, 2019, when regime officials issued a three-fold gasoline price hike and sparked outrage across the country, spreading to more than 190 cities.
It’s worth noting that Khamenei’s sole “red line” is that any significant decision regarding the price of gasoline should refrain from sparking a larger and more widespread uprising, potentially resulting in his overthrow.
Khamenei is focused on downplaying and denying the fact that the price of gasoline is only one of several crises threatening his regime and could potentially lead to a social uprising and the overthrow of the mullahs’ rule.
After years of plundering and criminal measures, Khamenei is now facing the inevitable plunging of his regime into the deep waters of different crises.