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Gasoline crisis persists amid rising prices

Gasoline crisis persists amid rising prices

The increase in fuel prices in Iran aims to address the fuel deficit and comes amid economic pressures from U.S. sanctions. The government raised the price per liter of gasoline from 50,000 rials to 100,000 rials, while also providing discounted quotas for consumers. Although this increase may boost government revenues and help manage demand, its impact on reducing consumption is limited due to ongoing inflation and the continued high consumption of old, dilapidated cars. The country suffers from a chronic production shortfall, with gasoline consumption reaching 132 million liters daily compared to a production of 122 million liters. The price hike also poses inflationary risks and may lead to changing consumer behavior. The problem is further complicated by the ongoing issue of driving habits and the use of inefficient vehicles, which diminishes the long-term effectiveness of the price increase.

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