Iranian President Masoud Pezeshkian said on Thursday there is no doubt that gasoline prices must rise, signaling that long-anticipated fuel reforms are moving closer despite fears of renewed public unrest.
Speaking during a visit to West Azarbaijan province, Pezeshkian acknowledged that raising fuel prices is unavoidable to address Iran’s worsening energy shortages but cautioned that any decision would require “careful planning” to avoid deepening economic hardship.
“There is no question that gasoline must become more expensive,” he said, according to state media. “But it is not a simple decision. We cannot act overnight or create more difficulties for people.”
His comments came amid intensifying debate over Tehran’s plans to introduce a new pricing system aimed at curbing soaring fuel consumption and smuggling.
Over the past two weeks, Iranian media have reported that the government is reviewing several reform scenarios, including multiple pricing tiers and possible changes to fuel quotas.
Last week, Khaneh Eghtesad published what it said was a leaked cabinet decree outlining a roadmap for “gradual correction” of gasoline prices. The government initially denied the report but later confirmed that the issue was under study by cabinet working groups.
Cabinet secretary Kamal Taghavi-Nejad said this week that fuel reform had been discussed but “no final decision” had been taken. A lawmaker, Amirhossein Sabeti, said the debate over introducing three fuel price tiers had become serious in parliament.
Energy officials say domestic gasoline consumption has surged well beyond refining capacity, forcing costly imports and draining subsidies that analysts estimate at more than $30 billion annually.
Pezeshkian has pledged to overhaul Iran’s energy subsidy system, arguing that maintaining the current artificially low prices is unsustainable. “Even water costs more than gasoline in Iran,” he said earlier this week.
The last major fuel price hike in November 2019 sparked nationwide protests that were met with a violent crackdown. Rights groups and Reuters reported that at least 1,500 people were killed.
Officials have since stressed that any future reform would be gradual and paired with compensation measures for low-income households. The administration insists it will not repeat the sudden price shock of 2019.
Economists warn that aligning prices with real production costs could sharply raise inflation but may also help reduce smuggling and waste. The government is expected to unveil its energy reform framework before submitting next year’s budget in December.
Mohammad Noursalehi, head of Isfahan’s City Council, told the Iranian Labor News Agency (ILNA) that the Zayandehrud Dam -- the main source of water for central Iran -- is reaching critically low levels.
“If the current trend continues, even drinking water for citizens will be at risk within the next 45 days,” he said.
According to Noursalehi,the dam is releasing several times more water than it receives, and much of that flow never reaches Isfahan’s main treatment plant because a large portion is diverted or lost along the route through both legal and illegal withdrawals.
Five million people at risk
He warned that more than five million people in Isfahan, Yazd, Chaharmahal and Bakhtiari, and Qom provinces depend on the Zayandehrud for drinking, agricultural, and industrial water.
“This is no longer just an agricultural or industrial problem. People’s drinking water is in danger,” he said, calling for the immediate suspension of non-drinking water use.
Noursalehi urged the government to accelerate long-stalled water transfer projects such as the Kouhrang-3 tunnel and the southern Isfahan pipeline, saying that decades of delay had compounded the crisis.
“If these projects had been completed on time, we would not be facing this situation today,” he said.
The council head also warned of severe environmental consequences, noting that the complete drying of the Gavkhouni Wetland -- once a UNESCO-listed ecosystem -- threatens the region’s biodiversity.
Land subsidence is already visible across Isfahan’s plains, Noursalehi said, warning that groundwater depletion has caused the ground to sink in several northern districts, prompting the evacuation of some schools.
“If this continues, Isfahan’s centuries-old monuments could face serious structural threats,” he said.
Officials in Iran have recently acknowledged that 19 major dams across the country are below 20 percent of capacity, with some hydropower plants -- including Tehran’s Amir Kabir Dam -- forced to halt operations.
Environmental researchers say the country is nearing “water bankruptcy,” driven by decades of overuse, unscientific dam-building, and poor water management.
Autumn remains dry, reservoirs at record lows
The first month of autumn passed with almost no rainfall across most provinces, according to the national meteorological organization. Officials said precipitation this year has dropped up to 45% below seasonal averages, leaving many regions facing possible rationing of drinking water.
Ahad Vazifeh, head of the National Center for Climate and Drought Crisis Management, said on Thursday that “no significant rain is forecast for at least the next three weeks,” warning that water shortages in major cities, including Tehran and Isfahan, will persist.
“Even if winter brings above-average rain, it will not compensate for the current deficit,” he said.
Government data show that total water stored in Iran’s 193 main dams has fallen to 17.6 billion cubic meters -- just 34% of full capacity and down nearly a quarter from last year.
Inflows since the start of the new water year have dropped 39%, while the outflow from reservoirs has declined by 29%.
The Zayandehrud dam in Isfahan is now only 13% full, the Lar dam near Tehran 2%, and the Independence dam in Hormozgan 6%, according to the Energy Ministry.
Many southern and central reservoirs have reached “dead storage” levels, rendering water unusable for supply or power generation.
Experts say Iran’s worsening drought, coupled with climate change and policy missteps, is transforming water shortages into a potential national security concern. Hundreds of villages now rely on water deliveries by tanker, while protests over shortages have erupted periodically in several provinces.
In an interview with ISNA, Shamkhani said national cohesion was vital in the face of external pressure and domestic challenges.
“We are all in the same boat shaped by the sacrifices of the martyrs of the Islamic Revolution, and it would be a shame if our differences created weaknesses,” he said.
He urged all political groups to “act together under the leadership of the Supreme Leader,” adding that adversaries were trying to exploit divisions to harm the country.
The comments came just days after footage surfaced online showing Shamkhani escorting his daughter at a wedding ceremony in a Tehran luxury hotel.
The video, shared widely on X since mid-October, appeared to show a large, Western-style celebration and drew sharp criticism from social media users accusing officials of hypocrisy amid the country’s deepening economic crisis and renewed enforcement of hijab rules.
The wedding reportedly took place in April 2024 at Tehran’s Espinas Palace Hotel. At the time, Iranian outlets estimated the cost at about 14 billion rials (over $21,000). The family did not comment on the reports, and Shamkhani has not publicly addressed the new controversy surrounding the footage.
Shamkhani, a former secretary of Iran’s Supreme National Security Council and now a member of the Expediency Council, has long been a prominent figure in Iran’s security establishment. He also serves as the Supreme Leader’s representative in the National Defense Council.
Leak fuels political blame game
The video has drawn reactions even from hardline circles. Some conservative commentators questioned how senior officials could call for patience under sanctions while appearing at opulent private events. Others defended Shamkhani, saying the ceremony was private and attended only by family members.
Former state broadcaster chief Ezzatollah Zarghami described the exposure as “a new method of assassination,” accusing Israel of waging psychological warfare through cyberattacks. IRGC-linked Mashregh News also said the leak aimed to “undermine an effective official,” blaming both “foreign enemies and certain domestic circles.”
The hardline daily Kayhan, which is funded by the Supreme Leader’s office, went further, accusing allies of former president Hassan Rouhani and ex-foreign minister Mohammad Javad Zarif of involvement. The paper called the release of the footage a “proxy character assassination,” saying that Shamkhani’s past criticism of Rouhani’s handling of nuclear policy had fueled political resentment.
Pro-hardline activists echoed that view online, arguing that the leak followed Shamkhani’s recent comments implicating the previous administration in the delayed acknowledgment of the 2020 downing of a Ukrainian airliner by the Revolutionary Guards.
Figures close to Rouhani have denied any connection to the leak. A source told the news outlet Khabar Online that the act was “unethical and contrary to Islamic norms.”
In a formal decree on Tuesday, Pezeshkian instructed the judiciary, the ministries of interior, intelligence, justice, foreign affairs, and economy, as well as the Central Bank, to implement the law in accordance with national regulations -- a condition that could limit its impact even as Tehran seeks to ease its isolation from the global financial system.
Under conditions set by parliament and endorsed by the Expediency Council, Iran will act “within the framework of the constitution,” and in cases where any provision of the convention conflicts with national laws, “domestic legislation will take precedence,” council spokesman Mohsen Dehnavi said.
The move, which follows years of political wrangling, comes just a day before the Financial Action Task Force (FATF) plenary in Paris on October 22–24, where delegates from over 200 jurisdictions will discuss mutual evaluations and global efforts to combat money laundering and terror financing.
Iran’s Financial Intelligence Unit chief, Hadi Khani, has traveled to Paris to attend FATF plenary for the first time in six years at the group’s official invitation, according to state media.
Khani, who also serves as deputy economy minister and secretary of Iran’s Anti–Money Laundering and Counter-Terrorist Financing Council, is expected to outline Iran’s progress on its action plan, focusing on the recent approval of its accession to the UN Palermo Convention against transnational organized crime.
The Iranian delegation will brief FATF members on legislative and implementation steps and coordinate future meetings to address questions and clarify outstanding issues, IRNA reported.
In May, Iran’s Expediency Council, conditionally approved the country’s accession to the Palermo Convention, one of the two key legislative items tied to the FATF standards, alongside the CFT.
The Expediency Council, overseen by Supreme Leader Ali Khamenei, mediates disputes between parliament and the Guardian Council, a body that vets laws and candidates.
Supporters say joining the UN convention could help Iran align with FATF standards, reconnect with global banking systems, and attract investment, while hardliners warn it risks exposing financial channels used to evade US sanctions and fund regional allies.
Parliament Speaker Mohammad Bagher Ghalibaf sent the bill to Pezeshkian for implementation under Article 123 of the constitution last week after lawmakers rejected a conservative-backed motion to block the move, clearing the way for Iran to finalize its accession.
Iran and North Korea remain the only two countries still outside the FATF framework.
