Gasoline prices may increase sharply in Iran

The Iranian government is considering a significant increase in gasoline prices in the country. The discussions come as economic pressure mounts ahead of new U.S. sanctions, which have sent food and other goods prices soaring.

Officials say the current subsidized fuel prices are a huge burden on the state budget. Iranians currently consume about 135 million liters of fuel per day, while production is around 121 million liters.

The government is considering several options for raising fuel prices. The first option would leave prices unchanged and some gas stations could close once the limit is reached. The second option would offer all citizens 30 liters of fuel per month at the lowest price. The third option would liberalize gasoline prices.

The government is also considering a price of 872,000 rials per liter, or about 44 cents. But such a sharp increase could further fuel inflation by increasing transportation and logistics costs.

Iranian President Masoud Pezeshkian said on Sunday that the country faces many challenges and that the government is working to protect its people from hardship. Government officials have said that the 60-liter fuel quota at the cheapest rate will remain in place, while other rates may be gradually reduced.

According to the Statistics Center, prices in the country rose 88 percent in July compared to the same month in 2025, with food inflation exceeding 128 percent. The fuel price hike could also put pressure on the prices of other goods and services through transportation costs. The government is expected to make a final decision in the coming weeks.

The Iranian rial has also depreciated to a record low as the United States prepares to announce new sanctions. On August 24, the dollar rose to 2.02 million rials on the unofficial market. The official exchange rate of the Central Bank is about 1.5 million rials per dollar. The country's currency is under pressure amid inflation, slowing economic growth and a war that has been going on for almost six months.