The Iranian government’s recent announcement of electricity price hikes, particularly affecting high-usage households, is fueling public outrage, especially as millions of low-income families already struggle under inflation and economic hardship.
The regime’s Energy Minister Abbas Aliabadi confirmed that under the “Electricity Industry Deregulation Act,” state support for energy subsidies will diminish, making citizens responsible for purchasing electricity themselves. “The government will no longer subsidize electricity payments,” Aliabadi told state media, stressing that heavy consumers must now buy power from the open market or renewable sources. However, without sufficient renewable infrastructure, critics argue that lower-income households, already financially burdened, will likely face inflated bills and potential cutoffs.
This development comes amid longstanding public frustration over inflation and subsidy cuts, which have previously sparked widespread unrest. Notably, in May 2022, protests erupted across Iran in response to price hikes in basic goods, sparked by policies that removed subsidies and deregulated flour prices. Regions across the country—from Khuzestan to Tehran—saw clashes with security forces, internet shutdowns, and significant crackdowns that only intensified public anger.
#Iran Faces Escalating Crisis Amid Power Outages and Economic Woeshttps://t.co/E1S7n7ZB9f
— NCRI-FAC (@iran_policy) August 25, 2024
The current 1404 budget proposal continues this trend, allocating substantial funds to the military and government sectors while leaving essential public services underfunded. Notably, the government has proposed a 20% wage increase for public sector employees, yet the official inflation rate currently sits at 30-40%, meaning most Iranians will feel no relief from rising costs.
Fearing the social backlash, MP Hassanali Akhlaghi Amiri criticized the proposal, questioning how citizens can manage their expenses under these conditions. “With inflation high, a 20% wage increase falls far short, leaving families struggling to meet their basic needs,” he remarked, pointing out that unresolved issues around fuel and exchange rates only deepen the financial uncertainty.
Iran’s ongoing energy crisis further complicates the situation. This summer, the country faced a 20,000 MW electricity shortfall that forced rationing across residential, agricultural, and industrial sectors. The government blames this on rising domestic demand, while experts attribute it to mismanagement, inefficiencies in thermal power plants (operating at only 37% efficiency), and an outdated grid system. According to data from Tavanir, Iran’s power distribution company, approximately 40 terawatt-hours of electricity—enough to supply 40% of Iranian households—is lost annually due to infrastructure inefficiencies.
Despite Iran’s considerable wealth, widening economic disparities have turned into deep societal fractures over recent years, as regime-affiliated analyst Amir-Mahmoud Harirchi acknowledged: “Class divides in Iran have turned into fault lines over the years, caused solely by increasing poverty and the worsening economic situation. This situation has emerged despite Iran’s wealth, yet we continue to witness an expansion of poverty.”
Watch and judge how #Khamenei who has been squandering #Iran's wealth on global terrorism and regional warmongering has got the nerve to accuse ordinary people of wasting water, bread and electricity. pic.twitter.com/YCGqWdVkK7
— NCRI-FAC (@iran_policy) January 29, 2024
The decision to raise electricity rates for high-consumption households also deepens the socioeconomic divide, with poorer citizens facing heavier energy burdens than ever. Saeed Ajorlou, a state-affiliated analyst, cautioned that such policies risk destabilizing society. “Any sudden decision that creates shockwaves or hyperinflation could halve Pezeshkian’s popularity overnight,” Ajorlou warned, adding that ignoring people’s demands could lead to widespread unrest.
Some state officials fear that, without effective solutions to inflation and basic living costs, these policies could ignite new waves of protests. Iran’s budget proposal, focusing heavily on security spending rather than alleviating economic pressure, highlights the regime’s prioritization of self-preservation over public welfare. With electricity hikes looming, many worry that the government’s moves might provoke another round of protests akin to the 2022 uprisings, where economic hardship and systemic grievances collided in explosive demonstrations across the nation.