Iran raises price of petrol as US applies economic pressure

Tehran, the capital of Iran, announced on Sunday that it was raising the price of petrol to counter US economic pressure. Iran, being a major oil producer and having some of the world's cheapest fuel, has been heavily subsidising petrol for years, which makes any changes to pricing a politically sensitive issue. The government has divided petrol pricing into three tiers: 1,500 tomans per litre for the first 60 litres, 3,000 tomans per litre for the next 50 litres, and 5,000 tomans per litre for any amounts exceeding that.

The price for the third tier will double to 10,000 tomans, which is equivalent to 4.5 US cents, effective from September 8. The first and second tiers will remain unchanged. The Iranian currency, the toman, has been trading at a rate of over 2.2 million rials to the US dollar on the black market, up from 1.7 million rials to the dollar before the Middle East war began on February 28.

The development coincides with the US increasing sanctions on Iran's economy, in an attempt to isolate the country and hasten the end of the war. These measures are part of a sanctions regime that has been in place since 2018, following President Donald Trump's withdrawal from an international deal on Iran's nuclear programme. Additionally, the US has placed Iran's ports under a naval blockade, aiming to reduce its oil exports to zero.