Iran imposes huge increases in fuel and food prices

[Hannah Bell]

Iran’s government has imposed massive hikes in the prices of subsidized goods and services, including gasoline, diesel, natural gas, electricity, water and flour. The price hikes, which came into effect last Sunday, are the first stage in what is now expected to be a two-step elimination of the government’s more than $100 billion price-subsidy program.

The price hikes included a trebling of the cost of water and electricity, a fourfold increase in the price of natural gas used in home heating and cooking, and a tenfold increase in natural gas as vehicle fuel....

Fearing the popular reaction to the price hikes, the government mobilized security forces in Teheran and other major urban centers...

In a speech to the nation Sunday, Iranian President Mahmoud Ahmadinejad conceded that the changes would have a major economic impact, calling them “economic surgery of a kind unseen since before the 1979 revolution. He also made a telling admission of the failure of the Islamic Republic to meet the basic needs of the people. He said he favored a society where the poor can “eat meat and buy refrigerators” and young people do not have to struggle to find housing, but such “justice” will take several decades more to achieve.

In recent years, as unemployment has grown and many workers have been forced into low-paying jobs on contract, the 16 subsidized goods and services have become an economic lifeline for tens of millions. Indeed, the subsidies are among the last significant social benefits of the 1979 Iranian Revolution, which toppled the US-sponsored monarchical dictatorship of Shah Reza Pahlavi.

The IMF, which strongly supports their elimination, estimates that they are equal to about $4,000 annually per Iranian.

http://www.wsws.org/articles/2010/dec2010/iran-d24.shtml

[DJ13]

1. The IMF, which strongly supports their elimination

Of course they do.

[Kaleva]

2. With a per capita income of $12,800.00 (2008 est.), a $4k increase is huge.

"In recent years, as unemployment has grown and many workers have been forced into low-paying jobs on contract, the 16 subsidized goods and services have become an economic lifeline for tens of millions. Indeed, the subsidies are among the last significant social benefits of the 1979 Iranian Revolution, which toppled the US-sponsored monarchical dictatorship of Shah Reza Pahlavi.

The IMF, which strongly supports their elimination, estimates that they are equal to about $4,000 annually per Iranian."