Iran’s latest gasoline price hike is weighing on daily life well beyond fuel costs, pushing up food prices, transport fares and medical expenses and adding strain to already stretched household budgets, citizens said in messages to Iran International.
A three-tier gasoline pricing system, including sales at 50,000 rials per liter, took effect nationwide from the early hours of Saturday.
The move was followed by further devaluation of Iran’s rial, with the US dollar trading at a record high of 1.3 million rials on Sunday.
Iran International asked its audience how the change was affecting living costs and received a wave of responses describing what many called a new economic shock.
A retired bank employee said that the impact was immediate. “Before gasoline became more expensive, my pension might last half the month. Now it probably won’t even cover 10 days. Living expenses no longer match a retiree’s income."
Others pointed to parallel increases in unrelated costs. One citizen said a natural gas bill jumped from 520,000 rials (40 cents) to 32 million rials ($25), while another complained that some basic goods had already vanished from shops.
“Because of the gasoline price hike, Pakistani and Indian rice couldn’t be found in stores today,” one message read.
Inflation fears and shrinking food baskets
Many respondents said higher fuel prices were feeding directly into inflation, particularly for food and medicine. “It affects everything. Tables get smaller and medicine becomes several times more expensive,” one citizen wrote.
The warnings come as pressure on patients has already intensified following the removal of preferential currency rates for some imported medicines.
On Saturday, Hadi Ahmadi, a board member of Iran’s Pharmacists Association, said many patients were buying only parts of their prescriptions or abandoning purchases altogether due to rising prices.
Several messages also pointed to increases in staple foods, including rice, bread, eggs and dairy products, even before the gasoline hike was formally announced.
Drivers and fuel-dependent workers hit hardest
Drivers and those whose livelihoods depend on fuel said they were among the hardest hit. A ride-hailing company driver wrote that higher gasoline prices had made it impossible to keep working because income no longer covered expenses. Others reported sharp rises in taxi and freight fares.
Some respondents framed the issue as a broader structural crisis. “When gasoline becomes more expensive, everything automatically follows,” one reader wrote. “Wages are paid in rials, but expenses are in dollars,” reads another message.
The hike has revived memories of November 2019, when a sudden fuel price increase triggered nationwide protests and a deadly crackdown.
Since then, fuel pricing has remained one of Iran’s most sensitive economic issues, with many citizens now warning that the latest changes are shrinking household budgets further and pushing more families closer to the poverty line.
Babak Mesbahi, a presidium member of the Iranian Pharmacists Association, said sanctions are indirectly choking payment channels and logistics.
“Based on recent officials’ statements, the country’s medicine reserves on average are less than two months,” he said. “Infant formula faces a similar situation, and about 800 items will face shortages over the next three months.”
Mesbahi told Didban Iran that “Sanctions do not directly target medicine and infant formula, but their side effects are entirely palpable. Currency transfers have become difficult and allocation faces problems, and these issues are directly caused by sanctions.”
Asked whether the government has eased FX transfers, Mesbahi said: “As far as I know, nothing specific has been done. Right now there are pro forma invoices that have remained four to five months in the allocation and transfer queue,” he added.
The end of preferential exchange rates on many imported inputs has accelerated price rises for finished medicines and raw materials, according to pharmacists’ associations.
Hadi Ahmadi, a board member of the Iranian Pharmacists Association, said daily currency volatility and rising input costs are pushing up prices, even for common medicines.
“About 70% of production costs – packaging, auxiliaries and other inputs – follow the free-market exchange rate, and only roughly 30% relates to active ingredients, so price increases are unavoidable,” Ahmadi told ILNA.
“When prices rise and insurance does not keep pace, patients either take incomplete regimens or walk away, and the treatment path is disrupted.”
He added that only two to three million doses of influenza vaccine were imported versus a need of six to seven million for a population near 90 million, and distribution was late, which contributed to wider spread of flu.
“Right now, the crisis is not fully felt by society because the Food and Drug Administration is managing empty warehouses,” said Alireza Chizari, head of Tehran province’s association of medical and pharmaceutical equipment producers. “But if this situation continues, the drug supply will become disastrous within one or two months.”
Iran is currently short of around 20 highly critical hospital medicines, while in recent years the country has consistently faced shortages of 40 to 50 drugs, he said.
Chizari said the widening gap between household incomes and rising medicine prices would directly hurt consumption. “The damage caused by the difference between people’s income and the cost of medicines will certainly hit the drug market,” he said.
Iran’s pharmaceutical sector has come under strain from foreign exchange shortages, sanctions-related hurdles and rising costs. In recent weeks, Iranian media have reported shortages of some imported medicines, including brand-name anti-rejection drugs used by kidney transplant patients, with pharmacies in several cities halting distribution.
Medical specialists have warned that sudden switches from imported medicines to domestic alternatives can pose risks for a minority of high-risk patients, even though locally produced drugs work for most cases.
Drug prices, medical equipment and healthcare costs have surged by about 70% since the government removed a subsidized exchange rate for medicine imports earlier this year, according to domestic media. Insurance coverage has not kept pace with price rises, leaving patients to shoulder more of the cost.
Industry figures and lawmakers have warned that continued delays in foreign currency allocation, rising import and shipping costs and budget strains in insurance funds could deepen shortages in hospitals and pharmacies in the months ahead.
“The transfer from Taleqan only resolves part of Tehran’s shortage and is not meant to eliminate it altogether,” said Mohammad Javad Zareian, head of the Research Center for Water Resources Studies at the Energy Ministry’s Water Research Institute. “If rainfall deficits continue, Taleqan’s water will not be sufficient.”
The Taleqan Dam, located in Alborz Province, is a hydroelectric facility with an installed capacity of 18 megawatts and serves as one of the five primary water sources supplying the Tehran metropolitan area.
Iran is in its sixth consecutive year of drought, with reservoirs at historic lows. Tehran's Latyan Dam is at its lowest in six decades, Karaj (Amir Kabir) holds under 10% capacity, and Mashhad's dams are below 3%.
Reserves depleted after years of overuse
Iran has faced droughts before, Zareian said, but the past two years have been more severe because buffers that once absorbed shocks have largely vanished. “Previously we had groundwater and storage behind dams, but those have been lost because consumption has exceeded available resources,” he said, adding that errors in water policy and population growth planning compounded the strain.
Long-term trends are moving in the wrong direction, Zareian warned, with declining resources and rising population. Climate change is also intensifying pressure by raising temperatures and reducing precipitation, a pattern seen beyond Iran.
The prolonged dry period has pushed reservoir levels across Iran to historic lows. The crisis is mainly due to decades of mismanagement. Agriculture uses 80 to 90 percent of the country's water but with less than 40 percent efficiency.
Too many dams have been built, leaky pipes waste 15 to 30 percent of supply, wastewater recycling stands at only about 20 percent compared to 85 to 98 percent in neighboring countries, and conservation efforts remain weak.
Separate livelihoods from drinking water
Zareian argued that Tehran and other large cities must separate livelihoods and economic activity from drinking water needs. Household drinking water accounts for only part of total use, he said, while many industries clustered around major cities are water-intensive.
“Except for high-tech sectors, most industries here consume large amounts of water,” Zareian said. He urged factories to cut consumption or rely on recycling within their own systems, a practice common abroad where industrial water is reused multiple times.
Proposals to pipe desalinated seawater to Tehran are economically unsound, Zareian said, citing prohibitive costs that would require massive state subsidies. “With one-tenth of that cost, demand management can stabilize conditions,” he said.
If rainfall fails to recover, authorities will have little choice but to impose consumption limits, he added, noting that drinking water would remain the priority.
