(Bloomberg) -- Iranian authorities doubled down on a controversial decision to raise domestic fuel prices, undeterred by protests highlighting the nation’s struggle to cope with U.S. sanctions.
Supreme Leader Ayatollah Ali Khamenei, who has final say on all state matters, publicly supported the decision. While lawmakers initially condemned the price hike, parliament said Sunday it had no plans to force the government to reverse it.
Several people have been killed in demonstrations that erupted in several cities after an economic committee on Thursday unexpectedly raised gasoline prices by as much as three times. The unrest spread to the capital, Tehran, where motorists on Saturday blocked highways and intersections with their vehicles in a dense snowfall.
“Some people certainly become worried or upset,” Khamenei said, according to local media. “But setting a bank on fire is not the work of people, it’s the work of thugs.”
The comments signal that Iran’s ruling establishment is ready to crack down on further protests as it grapples with crippling U.S. sanctions meant to curtail the country’s influence in the Middle East. Khamenei has already supported allies in Iraq and Lebanon facing mass anti-government protests.
The Islamic Republic is just the latest -- if most populous -- Middle Eastern nation to see public outrage over bread-and-butter issues like living expenses transform in recent months into potent political protests. Demonstrators have forced leaders in Lebanon and Algeria to resign and toppled a regime in Sudan. Hundreds of people have died in Iraq as security forces there cracked down on protests that have pushed the government to the brink of collapse.
In taking a hard line position against the protests, Iranian officials could be relying on their experience in quelling unrest over the past decade. In a familiar tactic, officials said Internet access was restricted for 24 hours.
Before Thursday night’s decision, gasoline prices were fixed at 10,000 rials a liter. Under the new pricing, most passenger vehicles will be limited to 60 liters of gasoline a month at 15,000 rials a liter, the state-run Islamic Republic News Agency reported. Any purchases above that amount will be priced at 30,000 rials a liter. Taxis, buses and trucks will have larger fuel allocations.
Officials said the increase is necessary to raise funds for the country’s state welfare program, which supports 18 million families.
The protests come against the backdrop of an economy reeling under sanctions imposed by the Trump administration after the U.S. pulled out of the 2015 nuclear deal between the Islamic Republic and world powers. The International Monetary Fund expects Iran’s gross domestic product to shrink 9.5% this year, compared with a 4.8% contraction in 2018.
--With assistance from Arsalan Shahla.
To contact the reporter on this story: Alaa Shahine in Dubai at asalha@bloomberg.net
To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Amy Teibel
©2019 Bloomberg L.P.
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