Via Financial Times

Iran’s supreme leader insisted there would be no retreat from the decision to raise fuel prices that has stoked the biggest anti-government protests across the country for two years.

Demonstrators on Sunday took to the streets in towns and cities across Iran for a third consecutive day, prompting the authorities to shut down the internet to prevent any co-ordination between the protesters. Security forces had on Saturday deployed tear gas and fired live rounds to disperse some of the largest and most violent demonstrations the country has seen since late 2017.

The Fars news agency put the number of protesters since Friday at about 88,000 in 100 towns and cities, adding that 1,000 demonstrators had been arrested. The agency did not give the number of deaths but said more than 150 banks and other stores had been set alight or looted in one province alone.

The unrest is in response to a decision by Iran’s government to increase petrol costs by 50 per cent, as the Islamic Republic seeks to navigate a sharp fall in state income due to crippling US sanctions.

Ayatollah Ali Khamenei, the supreme leader, on Sunday said the decision was based on the advice of experts and must be implemented. Iran subsidises energy to the tune of $69bn a year, according to the head of the state-run company in charge of fuel consumption.

Mr Khamenei acknowledged that some people had died in clashes, but insisted that rogue elements were to blame for the violence. “Setting a bank on fire is not the work of ordinary people, it is the work of thugs,” he said.

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In Tehran on Saturday, people stopped their cars on main roads to chant anti-regime slogans. Some businesses in the centre of the capital, including in the historic Grand Bazaar, closed their shops on Sunday for fear of damage to their properties.

Protesters tried to keep security forces at bay by burning dustbins and tyres in the streets. “We are unemployed. We have no future,” called out students in the city of Tabriz on Sunday. “Death to the dictator,” others chanted.

In the southern city of Shiraz, one of the centres of the disturbances, protesters gathered on Sunday to chant anti-regime slogans and shootings were heard, according to eyewitnesses. A resident in the port city of Bushehr reported “chaotic” scenes as demonstrators blocked a main crossroads. At least one person was killed in the southern town of Sirjan, according to officials.

“They lied to us,” one Tehran resident said of the fuel rise that the government had previously denied was planned. A restaurant worker in the city said the protests would not abate unless the government reversed the measure. “We will set this city on fire if they do not change their decision,” the person said.

Iran sits on huge oil and gas reserves, and Iranians who consider cheap energy as their natural right have over many decades shown little tolerance towards any increase in price. Iranians use more than 100m litres of petrol per day, while the relatively cheap price of fuel has encouraged smuggling to neighbouring countries.

However, Iran’s economy has been hit hard since US President Donald Trump last year pulled the US out of the 2015 nuclear agreement and imposed the toughest sanctions yet on the Islamic Republic. Iran’s gross domestic product is forecast to fall 9 per cent in 2019, according to the IMF.

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The increase in fuel prices was intended to generate more income for the government to buy basic goods and to pay the salaries of civil servants and pensioners. The government of Hassan Rouhani, the prime minister, has vowed to use the revenues raised to fund monthly handouts as early as next week.

Mr Rouhani, in his first response to the protests, said Iranians “had the right to protest but rioting was different from protesting”, adding any actions that created insecurity would not be tolerated. He also said his government would start paying compensation for the rise in petrol prices from Monday.

Mr Rouhani’s reputation has been hit hard by the unravelling of the nuclear accord — his signature achievement.

Mohammad Jafar Montazeri, Iran’s prosecutor-general, warned on Saturday that any disruption of public order was a crime and would be treated seriously.