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Protests in Iran - Petrol Price Hike

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November 20, 2019

Why in news?

Nationwide protests broke out in Iran after the government announced petrol price hike by 50% for first 60 litres and 300% for above that each month.

What is the decision taken?

  • Under the scheme, drivers with fuel cards would pay 15,000 rials (13 U.S. cents) a litre for the first 60 litres of petrol bought each month.
  • Each additional litre would costs 30,000 rials.

What was the implication?

  • Iran still has one of the lowest fuel prices in the world.
  • But, the current price rise was enough to trigger people who are already reeling under high inflation, joblessness and a collapsing economy.
  • Demonstrations broke out hours after the petrol price hike was announced, with thousands of people taking to the streets.
  • The protesters chanted slogans against the Islamic regime in Iran.
  • They carried “Death to Khamenei” posters, in a direct challenge to the country’s Supreme Leader Ali Khamenei, and burned down banks and stores.
  • Security personnel reportedly unleashed violence on the protesters, while the government shut down the Internet.
  • One person was killed and others injured in protests.
  • The death occurred in the city of Sirjan, where protesters tried to set a fuel depot ablaze, but were thwarted by security forces.
  • Both President Hassan Rouhani and Ayatollah Khamenei, the real ruler of Iran, have condemned the protests.
  • The Islamic Revolutionary Guard Corps, the country’s top paramilitary force, has threatened to crack down on the demonstrations.

What is the government’s rationale?

  • U.S. President Donald Trump decided in 2018 to pull the U.S. out of the 2015 nuclear deal and reimpose economic sanctions on Iran.
  • This has dealt a blow to Iran’s economy.
  • Inflation has risen to 40%.
  • A quarter of Iran’s youth are unemployed.
  • According to the IMF, the country’s economy is expected to contract by 9.5% in 2019.
  • Iran’s currency, the rial, has plunged to record lows against the dollar.
  • Evidently, the collapse of the nuclear deal has cost the Iranian economy dearly.
  • Given these, the current measure is expected to generate 300 trillion rials ($2.55 billion) per annum.
  • President Hassan Rouhani said 75% of Iranians were “under pressure”, and the extra petrol revenues would go to them.

What are the other challenges to Iran?

  • Iran is already struggling to fix a disturbed economy, hostile ties with the U.S. and waning influence in West Asia.
  • The nationwide protests are the latest challenge to the Iranian regime.
  • The protests have broken out at a time when Iran’s influence in Lebanon and Iraq is being challenged by protesters.
  • In Iraq, protesters burned an Iranian consulate and turned their anger against Iran-trained militias.
  • In Lebanon, where Iran-backed Hezbollah is a key pillar of the government, protesters demand the resignation of the entire political class.
  • Now in Iran, the protesters challenge the regime itself.

What is the way forward?

  • The latest round of protests might die down.
  • But, Iran needs a lasting solution to address its revolting tendency.
  • It cannot violently suppress the protesters forever.
  • Also, Iran badly needs to get the nuclear deal back on track.

 

Source: The Hindu

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