Iran’s president warned on Monday that the state is short of foreign currency and without parliamentary allocation of dollars for imports, gasoline prices would rise amid the country's economic crisis.
In a televised address, Masoud Pezeshkian admitted that in spite of promises that prices would not rise and that there would be no foreign exchange allocated for gasoline imports, it was a necessary means to manage in the worst recession since the founding of the Islamic Republic in 1979.
"When the allocation of foreign exchange is not compensated, gasoline prices will inevitably rise," he said.
He highlighted the financial strain posed by gasoline imports, citing a potential budget deficit that would harm low-income groups through inflation, referring to a shortage of foreign currency earnings that limit the government's ability to finance imports.
In the past six years, since the United States re-introduced oil export sanctions, the government has been forced to print more money that has pushed annual inflation to above 40%.
“When we allocate dollars to import gasoline, it leads to a budget deficit, resulting in inflation that harms low-income groups. By doing this, we exert pressure on them,” he added.
On Tuesday, Mohammad Bagher Ghalibaf, Speaker of the Parliament, countered by asserting that pricing petroleum products is the government’s responsibility.
“Let the government do its job, and we will not interfere,” he added.
The debate occurs while there are broader concerns over Iran's "energy imbalance," a term Pezeshkian used to describe the country's shortages in gas, electricity, and water.
During the interview on Monday, he stressed that unsustainable energy consumption, coupled with heavy subsidies amounting to $130-$150 billion annually, burdens the economy.
“This equates to 900 million rials [$1,300] per capita,” he said, emphasizing the incompatibility of current energy needs with production capacity.
Economy Minister Abdolnaser Hemmati also echoed concerns about shortages on Tuesday, pointing to rampant gasoline smuggling and the financial toll of imports.
Speaking at an insurance conference, Hemmati said: "Whenever we discuss this, people say we intend to increase gasoline prices. No logic accepts this massive gasoline smuggling while we are forced to import gasoline ourselves.
"As long as I am the Minister of Economy..., I will do my utmost to combat these rent-seeking practices. It is time for reforms. We must address the imbalances once and for all."
The potential for a gasoline price hike has sparked discussions ahead of next year’s budget approval, with parliament members divided. Some warned that such a move could provoke political unrest, reminiscent of the November 2019 protests following steep price increases during Hassan Rouhani's presidency.
Pezeshkian has consistently highlighted energy shortages, particularly around gasoline. His remarks that $5 billion is spent annually on imports contrast with figures from Tasnim News Agency, affiliated with the IRGC, which said last year’s total was $2 billion.
