Protests have broken out across Iran after President Hassan Rouhani announced Friday that petrol will be rationed and the government subsidy will be reduced, causing prices to increase by over 50 percent. Under the new plan, the government has stated that the excess funds created by the price increase will be redistributed to those families that need it most.

The government of Iran has long provided a subsidy on gas prices to its citizens. Under the new guidelines, citizens will be able to buy 60 litres (~16 gallons) of petrol a month at the cost of 15,000 Iranian rials (USD 0.13) a litre. Every additional liter after the 60-litre cap will cost 30,000 Iranian rials (IRR) per liter. Under the previous guidelines, citizens were able to purchase up to 250 litres at 10,000 IRR per litre. These prices may at first appear incredibly low when compared to other countries. However, a combination of supply rationing, the plummeting value of the rial, rampant inflation, international sanctions, and other economic problems means that this increase will have sharp ramifications for the Iranian people.

JURIST