Fartashphoto's Blog

Prices in Iran increasing dramatically after lifting of subsidies

Posted in Uncategorized by fartashphoto on December 26, 2010

The Iranian government’s removal of decades-old subsidies for food and energy in an attempt to boost its troubled economy has spurred price increases on everything from fruit and vegetables to gasoline, generated work stoppages and emboldened the political opposition.

In Tehran, the nation’s capital, taxi fares that officially were to rise by 10 percent shot much higher as drivers imposed their own price increases. Some truckers across the country refused to work, complaining of government threats to revoke their permits if they raised their prices to offset higher fuel costs.

Crews on ferry boats operating between Bandar Abbas port and Qeshm Island in the Persian Gulf temporarily stopped working, complaining that the ticket prices set by the government had not gone up despite a four-fold increase in the price of fuel, the Mehr news agency reported.

The austerity measures, though long anticipated, have brought mounting public anger since they began Dec. 19. Government critics contend that they will hurt people with modest incomes while leaving the wealthy unscathed.

Some critics also say the government’s plan places the consequences of Iran’s confrontational foreign policy and nuclear program, which have provoked international economic sanctions, on consumers. Opposition leaders Mir-Hossein Mousavi and Mehdi Karroubi on Wednesday publicly questioned the wisdom of the new plan, calling it a “burden on the shoulders of the middle and lower classes.”

Iranian authorities say the cuts are part of an economic reform package that will contribute to the nation’s prosperity by reducing wasteful subsidies totaling as much as $100 billion a year.

Already, the prices of produce, diesel, gasoline, cooking oil, water and bread have risen dramatically. In downtown Tehran, the price of a loaf of brick-oven bread doubled overnight to 40 cents. Security forces have been deployed around the country in case public frustration boils over into civil unrest.

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