http://www.chron.com/disp/story.mpl/ap/world/4826471.htmlMay 22, 2007, 3:30PM
Iran hikes gasoline prices 25 percent
By ALI AKBAR DAREINI Associated Press Writer
© 2007 The Associated Press
TEHRAN, Iran — Iran jumped gasoline prices 25 percent Tuesday in a new blow to consumers already disgruntled over high inflation, and the government said it will begin rationing fuel in two weeks.
The moves are sure to increase public dissatisfaction with hard-line President Mahmoud Ahmadinejad, whose oil-rich nation faces the same quandary as the U.S. and its rising prices at the pump: A lack of refinery capacity forces it to buy gasoline on the world market.
Discontent has been growing in Iran in recent months over soaring prices. The cost of housing has doubled and prices for basic goods such as vegetables have tripled since last summer.
Portraying himself as a champion of the poor, Ahmadinejad was swept to power in 2005 on a populist agenda promising to spread oil revenues to every family, eradicate poverty and tackle unemployment, and he is facing increasingly fierce criticism for not delivering.
On Sunday, the government had said it would not increase fuel prices "at the moment." So drivers were shocked Tuesday morning to find gasoline prices were raised overnight to the equivalent of 38 cents a gallon from 30 cents.
The increase is part of the government's efforts to reduce state subsidies on gasoline and to discourage smugglers who have been buying fuel at Iran's relatively low price and sneaking it out of the country to sell elsewhere.