Economist Farshad Momeni has raised alarms over the possibility of a 40% gasoline price increase in Iran’s upcoming 2025 budget, calling the budget’s overall policies “dangerous and worrying.” In an interview with Jamaran, Momeni, an economics professor at Allameh Tabataba’i University, criticized the government’s lack of transparency and described this concealment as one of the primary flaws in the proposed budget.
According to Momeni, despite repeated warnings about the substantial social, economic, political, and national security risks that would come with a gasoline price hike, the government appears determined to move forward with the increase. Vice Chairman of the Parliament’s Program and Budget Commission, recently announced the government’s plan to raise gasoline prices by at least 40% in the next fiscal year.
This proposal follows the November 2019 gasoline price hike, which sparked widespread protests across Iran. The demonstrations were met with severe crackdowns, reportedly resulting in around 1,500 civilian deaths, according to Reuters. Public anger over the proposed increase reflects fears of similar consequences should gasoline prices rise sharply again.
Mehrdad Lahuti, Vice Chairman of the Parliament’s Program and Budget Commission, recently told ILNA news agency that a reduction in next year’s budget allocation for gasoline imports indicates that prices are “likely to become more expensive” in the coming year.
In his comments, Momeni also criticized the planned reduction of $6 billion in currency allocations for importing essential goods at a preferential rate, a measure which he argued will likely lead to increased prices and reduced availability of basic goods.
He warned that such policies would simultaneously exacerbate inflation and unemployment, increasing hardship in a country where over half of the population already lives below the poverty line. The ILNA news agency also reported indications of “price liberalization” and “the removal of government subsidies,” predicting that the reduction in the import budget and price liberalization of energy sources like electricity will sharply raise costs for the average Iranian.
Momeni went on to describe Iran’s post-1989 economic policies as a “crisis,” emphasizing that Iran’s economic management has not fundamentally changed in response to deep-rooted challenges. He pointed out the extreme inequality in wealth distribution, noting that 82% of the country’s liquidity is held by just 2.5% of depositors. He also argued that the government’s two-step budget presentation to parliament only worsens the transparency crisis.
Citing performance reports from Iran’s Sixth Development Plan, which covered the period from 2016 to 2021, Momeni highlighted that despite higher-than-anticipated allocations of foreign currency and Rial resources, only 9% of the plan’s goals were realized. He argued that these outcomes reflect the need for a complete overhaul of Iran’s economic administration if the country is to address its pressing financial challenges.
Source » irannewsupdate