Industry Minister: We Knew Gasoline Price Hikes Would Affect Other Goods

A member of the parliamentary economic commission, referring to rising prices of transportation fares, steel products, and food items, stated that if diesel prices rise, “the country is doomed.” The parliament speaker has proposed that the government use “mobilization capacity” to control prices.

Several representatives addressed the problems and consequences resulting from increased gasoline prices during the parliamentary session on Monday, December 4th. In this session, held in the presence of the industry minister, the representative of Abadeh warned that with rising diesel prices “the country is doomed.”

Rahim Zarei, representative of Abadeh and member of the economic commission, reported a 15% increase in steel products, a 30% increase in van and taxi fares, a 40% rise in liquefied gas, a 20% increase in imported rice and egg prices, rising flour prices, and a 25% jump in chemical fertilizer costs. He criticized the government for failing to establish and complete a system for identifying household incomes and a database after 11 years: “Many people send us messages saying they are in need and have not received any assistance payments so far.”

Davoud Mohammadi, representative of Qazvin and head of Article 90 Commission, also stated that the government has failed to control prices and people are burdened by rising costs of goods and services. He said: “In recent days, we have received numerous calls and messages from citizens indicating that payments from the gasoline price increase revenues have not reached their accounts…”

Nader Ghazi Pour, representative of Urmia, also demanded transparency regarding the money transferred and proof of the government’s claim that 60 million people will receive subsidies resulting from the gasoline price increase. He said: “Where are these 60 million people who are entitled to this money? Show them to us.”

Meanwhile, Ali Larijani, parliament speaker, called for the government to first control prices of goods produced by state companies or those whose imports are the government’s responsibility. Addressing the industry minister, he said: “It is sometimes heard that some state companies and even automakers have raised prices.” Larijani suggested that the government use “mobilization capacity” to oversee commodity price issues.

Industry Minister: Surge in Complaints

Reza Rahmani, minister of industry, mines, and trade, acknowledged that the government was aware of the impact of the gasoline price increase on other commodity prices. Regarding the impact of gasoline prices on taxi fares, he said: “We acknowledge that the gasoline price increase affects this sector and we are trying to ensure reasonable increases in this area.”

Rahmani, who just five days earlier had claimed there was no reason for price increases, said: “We knew that the gasoline price increase would affect the prices of other goods. The number of complaints has increased since the gasoline price increase, and 45 percent have been added to cases brought to the consumer protection organization… We have only been fighting the psychological atmosphere of price hikes.”

Other officials at the industry ministry had previously emphasized that there would be no price increases. For example, Yadollah Sadeghi, head of the organization for industry, mines, and trade, had announced: People should not worry. With increased market supervision, no imported or domestic goods will experience price increases.

Rahmani also stated that according to the market regulation task force resolution, no government agency has the right to increase prices until the end of the year: “Even sectors that had received price increase permits before the implementation of this plan and had not yet been applied have had their resolutions canceled. No government agency has the right to increase prices of any goods until the end of the year.”

Hosein Raghfar, an economist and critic of neoliberal and privatization policies, previously stated in an interview with the “Fararu” website that the government would have been better off spending the revenues from the gasoline price increase on commodity and service subsidies, including free education and health or cheap transportation, so people would feel less discrimination: “Paying the revenues from the gasoline price increase directly to people is a very heavy burden that the government has placed on itself. Giving 31 thousand billion tomans monthly in cash on top of current subsidies to people has many inflationary effects.“

According to this university professor, getting out of the current situation requires that the government not give the revenues from the gasoline price increase as cash to people but instead use it to create sustainable employment and boost production.

Source: DW