Middle East

Iran petrol prices surge as subsidies cut

Motorcyclist filling up at a Tehran petrol station (archive) Image copyright AFP
Image caption Iranians are hit with higher petrol prices shortly after electricity and water bills also rose

Iran has cut state subsidies on petrol in a move that saw prices rise at midnight by up to 75%.

Reports said Iranians rushed to fill up their cars before the deadline.

The government of President Hassan Rouhani hopes the move will bolster an economy battered by Western sanctions.

Petrol in Iran is still among the cheapest in the world but analysts say the increase will be unwelcome in a country where a quarter of adults are jobless or under-employed.

The subsidies have been blamed for making petrol cheaper than bottled mineral water.

The cost of subsidised petrol - which is available in limited amounts to each motorist - rose from about $0.16 (£0.09) a litre to $0.28 a litre at midnight.

The price of petrol sold outside that ration rose from $0.27 to $0.39 a litre. Diesel and natural gas prices also rose.

In 2007 there were riots at some petrol stations when cheap fuel was rationed for the first time. However, there have been no reports of unrest after the latest price hikes.

"We have been preparing for two months to implement these plans in provinces, cities and rural areas," Interior Minister Abdolreza Rahmani Fazli was quoted as saying by state news agency Irna.

So far this year Iranians have also seen electricity bills go up by 24% and those for water by 20%.

President Rouhani is currently negotiating with world powers to scale back Iran's controversial nuclear programme in return for an easing of international sanctions.

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