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Iranian government to raise product prices

James Reynolds Dec 20, 2010
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Iranian government to raise product prices

James Reynolds Dec 20, 2010
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STEVE CHIOTAKIS: In Iran, the government there has announced it’ll raise prices on everyday products. That means fuel, cooking oil, bread. Security forces today flooded the streets of Tehran warning Iranians not to protest the price hikes.

Here’s the BBC’s Iran correspondent, James Reynolds.


JAMES REYNOLDS: Iranians going to fill up their cars today know that they’re in for a bit of a shock. In some places, the price of fuel has gone up by 400 percent. On top of that, a loaf of bread is set to double in price. That’s because state subsidies on oil, flour and other basics are being removed.

Rouhi Shafii is an Iranian exile based in London. She has been talking to some of those in Iran already affected.

ROUHI SHAFII: A taxi driver was saying that he used to fill in his car twice a day. Now he has to do it about eight times higher of that price and he just can’t afford it because he can’t put the price for passengers up that much.

The Iranian government has provided subsidies on food, energy, and utilities since the 1980s. But Iran’s population has grown dramatically in 30 years. The subsidies now cost the state up to $100 billion a year. President Ahmadinejad has called it the biggest surgery to the nation’s economy in half a century.

I’m the BBC’s James Reynolds reporting for Marketplace.

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