Iran18 September, 20262 min read
Mohammad-Jaafar Ghaimpanaeh Warns Regional Energy Pricing Could Spark Inflation And 7 Million Tomans Subsidies
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Regional energy pricing could yield 720 trillion tomans revenue, about 7 million tomans per person. Experts warn it would create inflationary pressure on household living costs.
7 outlets told this the same way.
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Regional energy pricing debate
Iranian officials and economists are debating a proposal to supply energy at regional prices, with Mohammad-Jaafar Ghaimpanaeh, Deputy Executive of Mosaqan, saying the country would annually gain nearly 720 quintals of revenue and that “every Iranian would receive about 7 million tomans in cash subsidies.” Mohammad-Jaafar Ghaimpanaeh also linked the discussion to a broader pattern in Iran, saying that “Whenever in Iran efforts toward shock therapy begin, this type of remark is heard among political officials.”
The debate centers on whether regional pricing for energy carriers such as gasoline, gas, and electricity would create a new inflationary pressure on household living costs, with the Gold and Currency Telegraph News Network describing the deputy head of the executive branch’s remarks about earning 720 trillion tomans annually. The proposal is framed as a shift away from subsidized rates, with the same source describing regional pricing as selling energy at a rate close to export prices or market prices of neighboring countries rather than the current subsidized rate.
Inflation and past subsidy shocks
The discussion of energy subsidy reform is tied to Iran’s inflation history, with the Khabaronline account describing how the Mahmoud Ahmadinejad government implemented the Targeted Subsidies Law in December 2009 and how inflation rose from 12.5% in 2009 to more than 21% in 2010 and surpassed 30% in 2011. The same account says the government of Ebrahim Raisi eliminated the preferential exchange rate in 2022, and it states that inflation stood at 46.2% and that the base year of statistical data shifted to 53.1%.
The Khabaronline account also describes a later outcome, saying that “after only 9 months since that decision, point-to-point inflation has reached 89% and annual inflation has reached 69%.” The report adds that Mohsen Bagheri, a member of the Supreme Labor Council, said the living basket estimated at 42 million tomans in Dey had risen to more than 80 million tomans, and it notes that the government initially promised a one-million-toman voucher that was quickly neutralized by high inflation.
Gasoline price math and household impact
The debate also turns to gasoline pricing scenarios, with the Khabaronline account stating that Ghaimpanaeh said Iran buys gasoline at 130,000 tomans per liter and that, using that 130,000-toman price as a baseline, gasoline would have to jump by 43 times at once. The same account describes the inflation sensitivity of gasoline prices, saying that “every 10% increase in gasoline price would add 1.5 percentage points to inflation.”
The Khabaronline account frames the potential household impact through the logic of cost pass-through, and it says that the government promised to mitigate effects by paying a one-million-toman voucher to consumers, funded by elimination of the preferential exchange rate. The Economically focused accounts also connect the energy pricing debate to subsidy and voucher proposals, with اقتصاد آنلاین describing a separate discussion in Parliament about increasing the food voucher to 2 million tomans and stating that the head of the Parliament’s Social Commission said an initial proposal for the current stage is an amount between 1.5 million and 2 million tomans.