Iran on Tuesday announced a limited fuel price increase in a move which appears aimed at reining in costly government subsidies while avoiding public anger which has previously exploded into protests.
The move will introduce a higher fuel charge to drivers refueling without government-issued smart ration cards or beyond their allowed quotas.
Iran’s cabinet approved the new three-tier fuel pricing system that will introduce a 5,000-toman (4.4 cents per the free market rate) rate for motorists who refuel without their smart cards or after exhausting their lower-priced quotas, according to a government directive published by domestic media.
The initiative, dated November 23, says that the two existing subsidized rates — 1,500 tomans (1.3 cents) for monthly quotas and 3,000 tomans (2.6 cents) for non-quota purchases with personal smart fuel cards — will remain in place but with reduced allocations.
An across-the-board fuel price rise in November 2019 triggered nationwide protests that were quashed with deadly force, with hundreds reported killed and thousands detained.
The increased rate was kept and maintained unchanged until the latest initiative.
From mid-December, refueling with “emergency station cards” will be charged at 5,000 tomans. The rate represents about ten percent of the government’s refinery purchase cost, the directive said.
Reports in Iranian outlets earlier this autumn had indicated that several pricing scenarios were under review.
In late October, President Masoud Pezeshkian said there was “no doubt” that fuel prices would eventually need to rise as domestic consumption continues to climb.
Fuel demand has at times exceeded 140 million liters per day, outpacing production of roughly 110 million liters, driven by inefficient vehicles, smuggling and seasonal spikes, according to officials.
Under the new measures, government-plated vehicles, cars in free-trade and special economic zones, imported cars and newly registered domestic vehicles will no longer receive 1,500- or 3,000-toman quotas.
Instead, they will be allocated a monthly amount priced entirely at the new 5,000-toman tier. Private individuals owning more than one gasoline-powered car will be entitled to quota rates for only one vehicle.
Alongside the new pricing policy, the first cargo of imported super gasoline — 300,000 liters — was sold on Iran’s energy exchange on November 22 at 65,800 tomans (57 cents) per liter.
Tasnim news agency reported that further changes, including adjustments to gas quotas for CNG-powered taxis, are expected to be announced in February.
About 52 million barrels of Iranian oil were sitting in floating storage, the most since May 2023, with roughly half of the volumes parked off Malaysia, data from shipping-intelligence firm Kpler showed.
The offshore build has nearly doubled from a month earlier, the data indicated, and has risen sharply from early-2025 levels as cargoes wait for buyers.
Traders said the backlog has widened discounts on Iranian grades such as Iran Light, in some cases to as much as $8 a barrel below ICE Brent, compared with around $4 in late summer.
Reuters reported this week that that China’s official crude imports from Indonesia have surged to levels far above what Indonesia actually exports, prompting traders and analysts to say the barrels are likely sanctioned Iranian oil being rebranded after ship-to-ship transfers near Malaysia.
They said Iran’s suppliers have long masked origins by labeling cargoes as Malaysian, but tougher scrutiny of Malaysian oil by banks and Malaysia’s clampdown on at-sea transfers have pushed dealers to use Indonesia as a new paper origin.
On Monday, Indonesia announced it will auction the seized Iranian tanker MT Arman 114 and its 1.245 million barrels of crude oil starting December 2.
Even with the relabeling shift, analysts cited by Reuters said most Iranian crude bound for China is still transferred between tankers off Malaysia, and Kpler estimates China has taken about 1.37 million barrels per day of Iranian or suspected Iranian crude this year, mainly via such transfers.
The accumulation comes as the global oil market is well supplied, with OPEC+ easing production curbs and non-OPEC producers adding output, pressuring prices this year.
Despite US sanctions, Iranian exports are still running at their fastest pace in years, leaving more barrels vulnerable to congestion when demand slows.
China remains the dominant buyer of Iranian crude, largely through independent “teapot” refineries that import discounted barrels.
Traders said many teapots have nearly exhausted the import quotas they need to bring in overseas crude, cooling their appetite for new Iranian shipments.
Recent USsanctions on Chinese firms and terminals accused of handling Iranian oil, including the Rizhao Shihua crude terminal, have further complicated offloading, forcing some tankers to divert to alternative ports.
In comments sent to Iran International, residents described daily life under heavy haze in blunt, personal terms.
A resident of Urmia in northwest Iran said schools in Urmia and nearby Salmas were closed for two days because of dirty air. “They made us homebound and depressed,” the person wrote.
An Iran–Iraq war veteran with pulmonary injuries from Karaj said he had no choice but to keep working despite the smog. “Pollution is poison for me,” he wrote, “but if you miss one day of work, you fall behind for ten days.”
In Tehran, another resident said the air felt unbreathable. “They’ve turned Tehran into a gas chamber. You can’t catch your breath.”
Several other people echoed the same theme. “Breathing has become difficult,” one wrote, while another said, “There is a gray fog every morning. It feels like something is weighing on my chest.”
Parents and people with existing illnesses said they were hit hardest. One mother wrote: “My 17-year-old daughter has shortness of breath because of the pollution, and the doctor prescribed a spray.”
A marketing worker who said they have a lung condition wrote: “I have a lung problem and I can’t even speak up. Talking leaves me breathless.”
Another person reported persistent symptoms. “Long headaches and breathing trouble,” the message said, while another wrote: “My eyes burn so badly I can’t keep them open.”
People blame industrial pollutants
Many users blamed a mix of vehicle emissions, industrial smoke and heavy fuel burning.
One message cited “non-standard gasoline, high-consumption cars, and mazut and diesel used for power plants and factories,” saying they produce “thousands of tons of toxic pollutants every day.”
A resident of Zanjan province, a smaller industrial area, alleged that nearby metal workshops release smoke at night. “The smoke looks like thick mist,” the person wrote, warning that the health damage “will show itself later.”
Another contributor said the problem had spread beyond big cities: “Pollution has reached a stage where even small towns and villages are not spared.”
Psychological toll
Alongside physical complaints, the comments conveyed mounting psychological strain.
“People’s moods are tense and abnormal, and it is affecting work and daily life,” one person wrote.
Another said, “We’re terrified of getting sick and not being able to afford treatment.”
Several linked the crisis to rising medical costs with one Tehran resident saying the pollution had triggered asthma-like allergies and that a prescription now costs millions of rials.
While some submissions used strongly political language, the core grievance was consistent: residents said they feel unprotected against a recurring hazard that closures and short-term restrictions have not solved.
Forecasters said pollution could intensify through the end of the week in densely populated and industrial areas, warning that stagnant weather and temperature inversions could push air-quality readings in some places into the “very unhealthy” range.
The alert follows days of red readings in cities such as Tehran and Isfahan, highlighting a winter pattern in which vehicle exhaust, industrial output and heavy-fuel use combine with stagnant weather to drive smog spikes.
Tehran has recorded only six clean-air days so far this Iranian year (started on March 21), according to the capital’s Air Quality Control Company, and more than half of days have been unhealthy for sensitive groups – children, older adults, pregnant women and people with heart or lung disease.
With seniors making up about 8.4% of Tehran province’s population – roughly 1.2 million people – health experts warn that prolonged exposure during repeated pollution waves is elevating risks of respiratory and cardiovascular complications, adding to a crisis authorities have struggled to contain beyond temporary closures and driving restrictions.