Iran: Protesters clash with police after fuel price hike

A road is blocked by protestors after authorities raised gasoline prices, in Tehran, Iran, Saturday, November 16, 2019. (Majid Khahi/ISNA via AP)

Protesters in Iran clashed with police on Saturday in dozens of cities and the capital Tehran, angry at the government over a 50% hike in the gasoline price.

Traffic blocked roads in major cities after a night of demonstrations during which guns were fired and at least one person was killed.

Online videos show that police fired tear gas at protesters while mobs of protesters set fires. The capital of Tehran also experienced its first snowfall of the year on Saturday, adding to the chaos in the city center.

Lines of cars at gas stations were long and static, and many Iranian citizens, who have seen their savings evaporate as the national currency, the rial, collapsed, have taken the opportunity to express their dissatisfaction with the government.

Iranian state media also reported direct attacks on buildings by protesters.

"People attacked a fuel storage warehouse in Sirjan and tried to set fire to it," the state news agency IRNA reported.

Gas prices in Iran remain among the lowest in the world, but in a country with a relatively low average income the increase has been met with widespread anger.

Why did the government raise the price of gas?

Iranian President Hassan Rouhani told advisors that the move was intended to put money in its citizens' pockets and that the government has earmarked all funds to be used on subsidies for poor families.

"No one should imagine that the government has done this because it is economically struggling; not at all, not a rial of this will go to the treasury," Rouhani said, according to state media reports.

The economy has suffered under US-imposed sanctions that have been in place since 2018. Inflation is at 40% and the economy is expected to contract 9% this year.

Fuel in Iran is heavily subsidized, costing 10,000 rials (€0.08, $0.09, approximately) prior to the price hike. Rouhani argues that raising prices is a natural move considering the current conditions. The country's 80 million citizens currently consume about 90 million litres of oil a day.

"Increasing petrol prices is to the people's benefit and also to help the society's strata under (economic) pressure," he said.

The fuel-rationing measures should bring in 300 trillion rials ($2.55 billion) annually, the head of the country's Planning and Budget Organisation Mohammad Bagher Nobakht said on state television, adding that payments will start within the next 10 days.

They will range from 550,000 rials ($4.68) for couples to just over 2 million rials ($17.46) for families of five or more.