The Impact of Gasoline Price Hike Dominates Yalda Night Tables
Farameraz Tofighi, head of the wage committee of the Supreme Council of Islamic Labor Councils, says the increase in gasoline prices has had a 12 to 18.3 percent impact on the increase in prices of goods and services.
IRNA news agency, in publishing this report and referring to the claims of Iranian officials in the initial days of the gasoline price increase to control its inflationary effects and then their retreat and acceptance of the inflationary consequences of 2.5 to 4 percent from the gasoline price increase on inflation, writes that field observations indicate that price increases are much higher than these figures.
About a month ago, the government increased the price of rationed gasoline by 50 percent and free gasoline by 200 percent. Iran’s Statistical Center has not yet released inflation data for December, but inflation for November of the current year has been announced at around 41.4 percent.
Tofighi also told Mehr news agency that currently the minimum wage of workers does not even cover one-third of household expenses.
He said “with gasoline becoming expensive, the rate of wage cost coverage has dropped below 30 percent, and this decline is a disaster. These numbers show that currently, wages do not even cover one-third of expenses”.
The minimum wage for a worker in Iran has been set at 2 million tomans.
IRNA, referring to the surge in dollar prices from 11,000 tomans to above 14,000 tomans after the gasoline price increase, wrote that December is the first month in which the inflation from gasoline prices is set to dominate the basket of goods: many essential household items including vegetables and fruits as well as bread and bran products have experienced price increases of several tens of percent.
So far, Iranian officials have mostly tried to prevent price increases through “orders and rhetoric,” including Hossein Modares Khiaabani, Deputy Minister of Commerce at the Ministry of Industry, Mines and Trade, who said “any price increase under the pretext of changing gasoline prices in the illegal market is unlawful and will certainly be dealt with legally”.
He claims that the increase in gasoline prices in the prices of various goods and services has a “negligible effect”.
IRNA news agency also, in publishing another report, calculated that the cost of a Yalda night table for a gathering of 6 to 8 people amounts to half a million tomans, meaning if a worker wants to set up a normal Yalda night table, they would have to set aside one-fourth of their salary.
In this regard, Tofighi says that after the 2019 salary increase, at the beginning of the year, the salary covered about 45 percent of household expenses, but from the beginning of this year, purchasing power gradually declined, so much so that before the government’s decision to increase gasoline prices, the share of salary in covering living expenses reached 32 to 33 percent and practically monthly expenses became 3 times the income.
Reports indicate that with the increase in gasoline prices, car prices have also increased significantly.
Normally, an increase in gasoline prices should have a negative impact on car sales, but in Iran, as inflation peaks and the rial loses value, people rush to the currency, foreign exchange, and car markets to preserve the value of their rial assets.
In this regard, Ali-Reza Pourhosseini, a member of the union of automobile dealers and sellers, said that with the rationing of gasoline, dual-fuel vehicles have become more expensive by at least 15 million tomans, and cars whose production has stopped due to sanctions, such as Brilliance and Sandero, are experiencing exponential price increases.
Source: Radio Farda
