OPINION: Iran is in the grip of some of the worst social unrest since the 1979 Islamic Revolution, with nationwide protests demanding the downfall of a clerical leadership they blame for economic hardship and widespread corruption.
The unrest, which followed fuel price hikes on 15 November, has rocked the regime to its foundations, uniting Iranians in the ethnically diverse country of 80 million citizens.
The authorities have responded with their usual iron fist to quell the unrest in more than 100 cities, killing many and ordering an almost complete internet shutdown to prevent demonstrators from organising events. Amnesty International says more than 100 people have died since 15 November.
The eruption of anger followed the decision by the government to raise fuel prices by up to 300%. The move proved the last straw for many.
For millions of Iranians, cheap petrol is practically considered a birthright in a country that holds the world’s second-largest gas reserves and fourth-largest crude reserves. Many Iranians eke out a living as part-time taxi drivers.
Despite the rises, fuel prices are still among the cheapest in the world, encouraging smuggling to neighbouring countries.
The price of petrol has gone up to a maximum of $0.25 a litre, while diesel, widely used in transportation, has been left unchanged at $0.065.
The government says the price rises were intended to raise around $2.55 billion a year for extra handouts to 18 million families struggling on low incomes.
The International Energy Agency estimates that Iran spent more than any other nation in the world to subsidise fossil fuel costs in 2018 — $69 billion in total. More than $26 billion went towards oil subsidies.
The price hikes are not the only bone of contention. Frustration has grown over a sharp currency devaluation and spikes in prices of bread, rice and other staples since US President Donald Trump ditched the landmark 2015 nuclear deal between Iran and world powers as part of his "maximum pressure" policy to force Tehran to rein in its regional ambitions, end its alleged support of international terrorism and curb its ballistic missile and atomic ambitions.
The sanctions have caused unprecedented economic hardship among ordinary Iranians while the ruling elite, including the Revolutionary Guards, have enriched themselves through sanctions busting and misuse of scarce public funds.
Senior members of the guards and the clergy live a lavish lifestyle both in Tehran and in their luxury mountainside villas north of the capital.
There is little doubt that Trump’s strategy has crippled the country financially. Oil exports, the mainstay of the economy, have fallen to about 250,000 barrels per day from a peak of 2.5 million bpd in April last year.
The current protests evolved quickly into calls for the end of a ruling system incapable of taming a financial crisis that many Iranians believe is of its own making.
Iranians have in the past enjoyed a relatively high standard of living thanks to robust oil revenues, which make up most of the state budget.
However, authorities no longer have much to offer to keep a restive population at bay because of the crippling sanctions.
While the regime is sure to use excessive force to crush the growing protest movement, the economic situation is likely to get worse as inflationary pressures are already building in response to the fuel price hikes, offsetting the effect of the meagre handouts to the poor who have traditionally been the backbone of the ruling clergy.
This is an Upstream opinion article.