Member of Parliament Hossein Samsami of the Majlis Economic Committee warned on Monday 17 August that a petrol price rise under present conditions would be "a spark in a powder keg"12. The Majlis is Iran's parliament, and its economic committee scrutinises budget and subsidy policy, so the warning comes from inside the body that would have to approve any change.
The numbers behind it are published by the government itself. Point-to-point inflation, the measure Iran reports against the same month a year earlier, ran at 87.9% for the Iranian month of Tir, which ended on 22 July, with food and drink inflation at 128.1%, reported by Dawn citing the Iranian Labour News Agency and the Statistical Centre of Iran3. Iran's minimum wage runs at about 25 million tomans a month, or roughly 250 million rials, because one toman is ten rials and Iranian sources quote both4. That wage is being spent into food prices that have more than doubled in a year.
Kerman province announced a refinery-rate petrol rise on 12 August and cancelled it inside a day, so Samsami is describing a decision the state has already flinched from once. Petrol in Iran is sold far below the cost of producing it, which makes the subsidy a growing hole in the budget and the price rise the obvious repair; what stalls the repair is the political cost, and Kerman measured that cost in a single day. The central bank's contribution in the same month was to open Iran's first foreign-currency investment fund, which serves the people who hold currency rather than the people queueing for coupons.
Washington's shortage this week acquired a contract, a term and a delivery rate. Tehran's arrives in a household's grocery bill, and no procurement decision reaches it.
