Iran's leaders are struggling to keep the war effort going while the economy reels from a record currency collapse, soaring prices and fuel shortages.
When fighting eased with the April 8 and June 15 ceasefires, attention inside Iran shifted back from the battlefield to an economy hit by sanctions and mismanagement, with a string of worsening indicators.
The pressure is increasingly visible, with cars forming lengthy queues for petrol, jobseekers confronting security forces and officials openly debating how long the state can afford to keep basic goods affordable.
Mohammad Ghaempanah, executive vice president under President Masoud Pezeshkian, questioned whether the government could continue selling petrol for 15,000 rials ($0.007) a litre.
“You cannot buy gasoline that costs 700,000 rials per litre for 15,000 rials. No sound mind accepts this,” Mr Ghaempanah was quoted as saying on Monday by the Iranian Students’ News Agency.
His remarks underscored the government's dilemma, as higher prices could ease pressure on state finances and fuel supplies while further squeezing households already grappling with a contracting job market and declining purchasing power.
At the same time, however, hardline MP Ismail Kowsari called for government and parliament support to strengthen the military budget.
“I am aware of the details of the situation of the country’s armed forces and I believe that parliament and the government should use all their capabilities to increase the military and defence budget,” he was quoted as saying on Sunday by the official Irna news agency.
That tension is increasingly visible in daily life. In Saravan, south-eastern Iran, motorists reportedly waited for hours this week for rationed petrol, with cars stretching for kilometres.
Online reactions to Mr Ghaempanah’s comments highlighted the gap between wages and costs. “Give us a $3,000 salary and sell petrol for 750,000 rials ($0.34) a litre. No problem,” one commenter wrote.
“We workers also ask why someone whose wage should actually be $4,000 is paid $100,” a worker writing from Tabriz added.
Plunging purchasing power
Iran's rial has surged past two million to the US dollar. Annual inflation reached 66 per cent in July, while consumer prices were 87.9 per cent higher than a year earlier. Food and beverage prices rose by 128.1 per cent in the same period.
Central bank data shows prices for urban households were 84.4 per cent higher in August than a year earlier, with wages far below the rising cost of basic goods.
Hosein Rasouli, head of the Workers' House in Razavi Khorasan province, said employees earned about $82 a month at Wednesday’s exchange rate.
“An Iranian worker with about $82 monthly wages does not even have the ability to provide many basic goods of life,” Mr Rasouli said, quoted by Isna.
In Hormozgan province, workers' representative Esmail Hajizadeh said about 20,000 employees had lost their jobs as businesses closed or cut staff.
Some companies have reduced employees to 10 days of work a month, while others have directed staff to labour offices to apply for unemployment insurance, he said.
Mr Hajizadeh put the cost of a family’s basic consumption basket at about 900 million rials a month. Minimum monthly wages are about 170 million to 180 million rials.
As formal employment disappears, some workers have turned to informal jobs, including passenger transport, fuel sales and smuggling, he added.
'Nothing left'
The economic pressure has also fuelled labour protests.
In Ahvaz, young jobseekers protested outside Dabal Khazaei sugar cane company, demanding jobs and priority for local workers. The Karoon Human Rights Organisation reported that security forces used gunfire and beatings to disperse them. In a video of the confrontation, a man said the protesters were hungry, unemployed and had “nothing left”.
The government has acknowledged severe pressures while rejecting claims the economy is close to collapse.
Central bank governor Abdolnaser Hemmati said on Tuesday that Iran had sufficient foreign currency reserves and that the bank could inject up to $2 billion into the market. It had injected $500 million into the foreign exchange market in the last week, he added.
“Iran has foreign currency and it has enough,” Mr Hemmati said, addressing US President Donald Trump.
Mr Hemmati said the bank had supplied more than $18 billion in foreign currency since March 21 for imports including food, medicine, animal feed and factory raw materials.
He acknowledged the strain on households, saying economic conditions and managing people's livelihoods had become difficult. He said an economic collapse “has never happened and will never happen”.
Security forces have used deadly force to crush major protests sparked by price hikes at least three times since November 2019, and the regime is wary of a repeat of the unrest.
Judiciary chief Gholam-Hossein Mohseni-Ejei warned this week of a firm response to anyone taking to the streets.
