Ahmadinejad Cuts Subsidies, Price of Gas Quadruples

Riot police deployed in case of chaos
By Kevin Spak,  Newser Staff
Posted Dec 20, 2010 2:00 PM CST
Iranian President Mahmoud Ahmadinejad gestures prior to an official welcoming ceremony for Qatari Emir Sheik Hamad Bin Khalifa Al Thani, unseen, in Tehran, Iran, Monday, Dec, 20, 2010.   (AP Photo/Vahid Salemi)

(Newser) – Mahmoud Ahmadinejad took the dramatic step of eliminating state subsidies on fuel, food, and other essential items this weekend, sending their prices skyrocketing for ordinary Iranians. Gas prices quadrupled overnight, and the price of diesel jumped 900%, the New York Times reports. Ahmadinejad said the step was necessary given Iran’s budget woes, and said a $40-per-person monthly compensation payment would make up for the price bumps. He also asked people “not to hoard gasoline,” because “God forbid, accidents could happen.”

Riot police were deployed to gas stations in Tehran just in case violent protests broke out—as they did when Iran had to ration fuel in 2007. But so far, there haven’t been any reports of a repeat this time, possibly because the government deposited two of those $40 payments in everyone’s account, and possibly because of Ahmadinejad himself. "Ahmadinejad is the person to do it," says one economist, because the "pious poor" the move will hurt most are largely fans of the president.

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