Iran to raise diesel prices in politically sensitive move

The Iranian government will raise diesel prices starting next month, Iran International has learned, in a move which could stoke unrest as economic malaise mounts.

Diesel will be sold at market rates, and a significant portion of government subsidies will be eliminated.

An executive directive outlining the changes has already been drafted and awaits official approval.

The change is likely to deepen the economic burden on citizens, adding to the existing strain caused by a weak currency and high inflation.

A gasoline price hike in November 2019 triggered days of nationwide protests, during which authorities deployed paramilitary forces who used overwhelming force to suppress the unrest.

At least 1,500 people were killed, according to a Reuters investigation.

Economic conditions have since worsened, with persistent high inflation pushing tens of millions of Iranians into deeper poverty.

Iran International reported in December that Iran was preparing to ease fuel subsidies in a move likely approved at the highest levels of government.

At the time, documents indicated that the monthly distribution of subsidized gasoline would be drastically cut from 87 million liters to 42.5 million liters.

Iranians had already begun noticing changes as fuel stations started installing eight-digit price displays—signaling a potential shift in pricing policies.

The diesel price increase comes as Iran’s top officials continue to discuss also a possible gasoline price hike this spring.

Sources told Iran International that security agencies are increasingly worried about the country’s growing dependence on fuel imports and its shrinking capacity to meet demand under escalating US sanctions.

Washington this week imposed a new round of sanctions targeting Iran’s oil industry, including key brokers, shipping firms, and the head of the National Iranian Oil Company.

These measures, part of the renewed "maximum pressure" campaign by the Trump administration, aim to cut Iran’s oil revenue, which remains the backbone of its economy and regional military operations.

With Iran pumping 3.2 million barrels per day as of January, the latest restrictions are expected to further strain the country’s financial and energy sectors.