Frashad Momeni, a government-affiliated economist, expressed concern over a potential 40% increase in gasoline prices in Iran’s 2025 budget proposal, calling the overall budget policies “dangerous and worrisome.”  

In an interview with the Jamaran website, this university economics professor criticized “secrecy” in the government’s framework, identifying the lack of transparency as a major flaw in next year’s budget proposal.  

According to Momeni, despite warnings to the administration of Iranian regime’s president Masoud Pezeshkian about the “significant economic, social, political, and even national security costs” that would accompany a gas price increase, the Deputy Chair of the regime’s Majlis (parliament) Budget and Planning Commission recently announced that the government intends to raise gas prices by at least 40% next year.  

The sudden rise in gasoline prices in November 2019 triggered widespread protests in Iran, which were met with a harsh crackdown by the regime. According to Reuters, at least 1,500 protestors were killed during the November crackdown.  

Mehrdad Lahouti, Deputy Chair of Majlis Budget and Planning Commission, told the government-affiliated ILNA news agency that due to a reduction in the government’s budget for gasoline imports in next year’s budget proposal, gasoline “is very likely to become more expensive next year.”  

In his remarks, Momeni criticized the $6 billion reduction in the foreign currency allocation for importing essential goods at subsidized prices in next year’s budget, noting that this action, along with reduced imports of essential goods, will drive up the prices of these items.  

He described this policy as one that will simultaneously increase inflation and unemployment, resulting in widespread poverty.  

ILNA has projected that next year, due to a $3 billion cut in the import budget, an inflation-adjusted increase in the preferential exchange rate, and the deregulation of energy prices—including electricity—costs will rise significantly.  

Momeni criticized the economic policies in Iran since 1989 as crisis-inducing and stated that the approach to managing the nation’s economy has remained unchanged.  

Referring to inequalities in cash flow distribution among Iranians, this economist noted that more than 82% of the country’s liquidity is concentrated in the hands of just 2.5% of depositors.  

He also described the government’s two-phase approach to presenting budget components to Majlis as a move that “exacerbates the transparency crisis.”  

Citing performance evaluation reports from the Sixth Development Plan, which covered the five-year period from 2016 to 2021, Momeni said that despite the allocation of foreign currency and rial resources “far beyond the amounts projected in the legislation,” only 9% of the plan’s goals have been achieved.

Abdolkarim Hosseinzadeh, Iran’s Vice President for Rural Development and Deprived Regions, stated that out of the country’s 69,000 villages, only 38,000 remain inhabited, while 31,000 have been abandoned.  

At a national conference of the Housing Foundation on Monday, November 4, Hosseinzadeh noted that in 1976, approximately 70% of Iran’s population lived in rural areas, while 30% resided in cities. This ratio has now reversed as the country faces “widespread” rural-to-urban migration.  

World Bank data shows that the proportion of Iran’s rural population dropped from 66% in 1961 to 51% in 1978, and this downward trend has continued since the 1979 Revolution, reaching 23% last year.  

The Vice President added that a range of factors—including job shortages, declining quality of life, social changes, income insufficiencies, and climate change—has posed serious challenges to Iran’s rural areas.  

The expectation of retaining rural populations persists even as rural inflation nearly matches urban inflation. Additionally, widespread unemployment, water crises, lack of amenities, and the government’s limited support for farmers have further strained rural households.  

For example, estimates by the Statistical Center of Iran indicate that only 40% of the rural population is employed, and 11.5% of these individuals work fewer than 44 hours a week, which is considered underemployment.  

In contrast, the underemployment rate among urban residents is 6.7%.  

Another notable point is that 43% of the rural population works in agriculture—a sector increasingly strained by water shortages and lack of government support.  

Last summer, Ali Akbar Mehrabian, the Minister of Energy, reported that 10,000 villages in the country lack access to drinking water, meaning more than a quarter of Iran’s villages do not have drinking water.  

Simultaneously, Majid Aghazadeh, Engineering Deputy of the state-owned Water and Wastewater Company, reported a water crisis in 27,000 villages across Iran, affecting a population of over 10 million.  

In total, more than 70% of the country’s villages are facing a water crisis.

Faramarz Tofighi, a labor activist, criticized Iran’s 2025 budget proposal and the “continuous liberalization measures by Pezeshkian’s administration and its adjustment policies,” stating that “foundational support measures are being eliminated” in this proposal.

In an interview with the state-run ILNA news agency, Tofighi objected to the fact that “the budget for certain special institutions has increased” while noting that there is no allocation in the budget for building power plants or ensuring electricity for the public; he claimed the aim is merely to raise prices.

Tofighi also commented on the currency policies in the budget proposal, stating that “systemic corruption in currency management is entrenched in the economy,” and instead of addressing this issue, preferential foreign exchange is being removed. “This way,” he argued, “the government earns revenue, but people become poorer.”

ILNA reports signs of “price liberalization” and “elimination of government subsidies,” stating that next year, due to a $3 billion reduction in the import budget, an increase in the preferential exchange rate in line with inflation, and the liberalization of energy prices, including electricity, expenses will rise significantly.

ILNA also cited statements from the Ministry of Energy announcing that “electricity prices will increase according to the law, and henceforth, citizens, especially high-consumption users, must source their electricity from the open market and renewable sources.”

The news agency pointed to another sign of “price liberalization” from statements by Mojgan Khanlou, spokesperson for the Budget Office, who announced that Pezeshkian’s administration has planned a gradual increase in the preferential exchange rate for next year, “aimed at controlling inflation.”

According to the report, next year’s budget includes a gradual increase in the preferential exchange rate for importing essential goods and medicines, which will be adjusted in line with annual inflation.

The report claimed that if inflation in 2024 reaches 30%, the preferential exchange rate for the euro will be set at 403,000 rials and for the dollar at 370,000 rials. These figures refer to the preferential rates that the government uses to purchase essential goods. Currently, the market rate for the dollar in Iran is 700,000 rials, and for the euro, it is 752,000 rials.

The ILNA report claims that, in the event of 40% inflation, the dollar will be set at 400,000 rials. These changes will drive up the prices of essential goods, such as chicken meat, which depends on preferential exchange rates and livestock feed imports.

According to ILNA, which is affiliated with the regime-aligned Workers’ House organization, the budget for importing essential goods and medicines has been reduced by 20% in the upcoming budget, dropping from $15 billion to $12 billion.

Tofighi added that higher energy prices will drive up the costs of all goods and services, imposing severe inflation on the economy.

He reiterated his belief that systemic corruption in currency management has taken root in the economy, and rather than solving this issue, preferential exchange rates are being eliminated. “This way,” he emphasized, “the government earns revenue, but people become poorer.”

The labor activist asked, “Should we expect chicken to cost 2 million rials per kilogram (about $2.85) and eggs to cost 150,000 rials each (around $0.21)?”