Squeezed by US Sanctions, Iran's Petrol Prices Soar
The United States has tightened sanctions to isolate the Iranian economy amid an ongoing conflict between the two countries. Under this pressure, the Iranian authorities have raised petrol prices for consumers with high levels of usage.
Iran’s quota system sets petrol prices at three tiers. The price is set at 1,500 toman per litre for the first 60 litres used in a month, then 3,000 toman per litre for the next 50 litres, and 5,000 toman per litre for usage above that amount.
The toman is a unit of account and informal currency widely used in everyday life in Iran. One toman is equivalent to 10 Iranian rials.
According to AFP on Monday (7 September 2026), Iranian government spokesperson Fatemeh Mohajerani announced on Sunday (6 September) that the third-tier price would double to 10,000 toman per litre.
“The tariff will rise to 10,000 toman starting the morning of 8 September,” Mohajerani said in a statement released by Iranian state media.
“Various figures were discussed in meetings of experts, but because the president (Masoud Pezeshkian) had made a promise to the public, the tariff of 10,000 toman was adopted,” she said.
In a follow-up statement, Mohajerani said petrol prices for the first and second tiers would remain unchanged.
Iran is a major oil producer with some of the cheapest fuel prices in the world, having provided large petrol subsidies for years. This makes any change in price a politically sensitive issue.
The development comes as the Iranian currency was traded on the black market on Sunday (6 September) at an exchange rate of more than 2.2 million rials to the US dollar, based on websites monitoring the currency’s exchange rate.
Before war broke out in the Middle East on 28 February, the Iranian rial stood at around 1.7 million rials to the US dollar. At the end of April, the exchange rate touched a record low of 1.8 million rials to the US dollar.
At the end of last month, US Treasury Secretary Scott Bessent set out plans to “strangle the Iranian economy”, in the hope of using financial pressure to hasten the end of the war.
These new measures complement the sanctions regime imposed by the US and its allies since 2018, when US President Donald Trump withdrew his country from the international agreement with Iran over its nuclear programme.
The US has also imposed a naval blockade on Iranian ports in an effort to push the country’s oil exports down to zero.