Protests strike Iran cities over gasoline prices rising

Overnight protests roiling several Iranian cities continued into Saturday, sparked by the government cutting back on gasoline subsidies and increasing costs by 50%, with demonstrations ranging from people abandoning their cars in traffic to trying to attack an oil depot in one city.

The demonstrations, though not as widespread as the economic protests that shook the country nearly two years ago, put new pressure on the government of Iran's relatively moderate President Hassan Rouhani.

The demonstrations on Friday night were "severe" in Sirjan in central Iran as "people attacked a fuel storage warehouse in the city and tried to set fire to it," state news agency IRNA said.

But police intervened to prevent them, it reported.

IRNA said "scattered" protests also broke out in other cities including Abadan, Ahvaz, Bandar Abbas, Birjand, Gachsaran, Khoramshahr, Mahshahr, Mashhad and Shiraz.

They were mostly limited to blocking traffic and were over by midnight, the news agency added.

Iran imposed petrol rationing and raised pump prices by at least 50 percent on Friday, saying the move was aimed at helping citizens in need with cash handouts.

The measure was expected to bring in 300 trillion rials ($2.55 billion) per annum, the head of the country's Planning and Budget Organization, Mohammad Bagher Nobakht, said on state television.

About 60 million Iranians in need would get payments ranging from 550,000 rials ($4.68) for couples to slightly more than 2 million rials ($17.46) for families with five members or more, he said.

Under the scheme, drivers with fuel cards will pay 15,000 rials (13 US cents) a liter for the first 60 liters of petrol bought each month, with each additional liter costing them 30,000 rials.

Fuel cards were first introduced in 2007 with a view to reforming the subsidies system and curbing large-scale smuggling.

Iran's economy has been battered since May last year when President Donald Trump unilaterally withdrew the United States from a 2015 nuclear agreement and reimposed crippling sanctions.

The rial has plummeted in value against the U.S. dollar, inflation is now running at more than 40 percent and the International Monetary Fund expects Iran's economy to contract by 9% this year and stagnate in 2020.

President Hassan Rouhani said on Saturday that currently, 75% of Iranians were "under pressure" and the extra revenues from the petrol price hike would go to them, and not the treasury.

Rouhani had tried to hike fuel prices in December but was blocked by parliament in the wake of protests that rocked Iran for days.

The speaker at the time ruled out the move as unpopular and said it was "not in the interests of the country."

The rationing and price hike come at a sensitive time as Iran prepares for a parliamentary election in February.

According to Nobakht, the price hike was agreed by the High Council of Economic Coordination, made up of the president, parliament speaker and judiciary chief, implying it had received the system's approval across the board.

Rouhani in his first term had voiced opposition to the petrol dual-price regime adopted by his predecessor, Mahmoud Ahmadinejad, saying "it caused corruption and that is why we made a unified rate" in a 2015 tweet.

His administration also scrapped Ahmadinejad's fuel card scheme, only to revive it this year while still denying rumours it was a precursor to petrol rationing and price hikes.