Iran Hikes Electricity Prices Amid Crippling Blackouts, Fueling Public Outcry

ERBIL (Kurdistan24) – Confronted with a staggering energy deficit and searing summer heat, the Iranian government has implemented a sharp increase in electricity prices, a measure ostensibly aimed at curbing rampant consumption but one that has ignited widespread concern and dissatisfaction among a populace already enduring daily, hours-long power outages.

Citizens across Iran report a bitter paradox: even as their access to electricity dwindles, their utility bills are soaring, adding a heavy financial burden to the physical discomfort of life without reliable power.

This move to raise electricity tariffs comes as Iran grapples with a multifaceted crisis, where chronic water scarcity and a failing energy grid have converged, exposing the profound vulnerabilities of the nation's infrastructure. While the government frames the price hike as a necessary tool to manage a severe electricity shortage, for many Iranians, it feels like a punishment for a crisis they did not create.

The decision has deepened public frustration, with citizens questioning why they must pay more for a service that has become increasingly unreliable.

In the city of Bokan, the impact is being felt acutely. Ayoub Amini, a local resident, conveyed his bewilderment and frustration to Kurdistan24. "In the past, our monthly bill would be 30 to 40 thousand (tomans)," he explained. "But now, we have no electricity at all, and yet we are paying double for electricity and water. We don't understand this situation. Since we are using less electricity than before, why must we pay double the price?"

Shopkeepers and business owners are also reeling from the dual pressures of power cuts and rising costs. The daily blackouts, often lasting for several hours, force many to invest in expensive generators to keep their businesses running.

Khalid Khairkhwa, another resident of Bokan, detailed the significant damage to his livelihood. "Every day, the electricity is out for two hours in the morning and two hours at noon," he said. "Even though in the past, when we had continuous power, the electricity bill was lower, around 100 to 150 thousand tomans. But now, along with the power cuts, the price has more than doubled, reaching 450 thousand tomans. This has caused a lot of damage to homes, businesses, and everyone who needs electricity."

The government's policy targets households and businesses that consume more than 300 kilowatt-hours of electricity per month.

Officials hope this financial disincentive will compel a reduction in usage and help compensate for a national electricity shortage that, for the residential sector alone, reached 15,000 megawatts this summer.

However, critics argue that the baseline consumption level is far below the actual needs of an average home or business, making the price hike unavoidable for most. With over 60% of Iran's electricity consumed by residential and commercial sectors, the government's strategy places the onus of conservation squarely on the shoulders of its citizens.

A Nation in a Perfect Storm

The electricity shortage is inextricably linked to a deeper, more existential water crisis that has gripped the country.

A recent report by The New York Times paints a grim picture of a nation in the throes of an acute environmental emergency, exacerbated by five consecutive years of drought and soaring temperatures that have seen the heat index in some parts of Iran reach a blistering 149 degrees Fahrenheit (65 degrees Celsius).

Deep reservoirs have shrunk to shallow ponds, and water pressure in major cities like Tehran has dropped so low that taps in high-rise buildings run dry for hours, forcing a desperate scramble for water tanks and a hoarding of every available drop.

The crisis has become so severe that the government has been forced to take drastic measures, including shutting down government offices and services in Tehran and other cities to conserve energy and water.

As highlighted in a report by Aljazeera, for millions of Iranians, daily life has been reshaped around survival, with residents memorizing blackout schedules and scrambling to store water during the brief periods it is available.

This "perfect storm" of water scarcity, power deficits, and record heat is exposing the fragility of Iran's essential services and turning daily routines into exercises in crisis management.

Decades of Mismanagement and Misplaced Priorities

While climate change is a contributing factor, a chorus of experts and analysts points to decades of systemic mismanagement as the primary cause of Iran's predicament.

A commentary from the Carnegie Endowment for International Peace notes that despite its vast oil and gas reserves, Iran faces a severe energy crisis rooted in "decades of mismanagement, excessive subsidies, corruption, and international sanctions," which have crippled infrastructure and distorted energy markets.

This view is echoed by reporting from Radio France Internationale (RFI), where experts emphasize that poor governance and entrenched corruption are the root causes.

Saeed Ghasseminejad, an Iranian economist interviewed by RFI, criticized the government for pursuing incompatible policies, such as aiming for a massive population increase and agricultural self-sufficiency while rivers and underground water sources were drying up. He further argued that the government has consistently prioritized military, nuclear, and intelligence spending over essential infrastructure, diverting funds and awarding large public works projects to companies linked to powerful entities like the Islamic Revolutionary Guard Corps (IRGC).

The Observer has also highlighted these systemic failures, noting that thirsty steel plants were built in arid cities and that farmers were pushed to grow water-intensive crops in a misguided bid for self-sufficiency. Furthermore, the report suggests that a significant portion of the nation's electricity, perhaps up to 5%, is being consumed by state-backed cryptocurrency mining operations, including those run by the IRGC, as a method to subvert international sanctions. Environmental expert Kaveh Madani described Iran's situation as a state of "water bankruptcy," where decades of missteps have exhausted previously abundant resources.

The Heavy Toll on Society and the Economy

The consequences of this cascading crisis are devastating, impacting public health, the economy, and social stability.

According to the Carnegie Endowment, the turn to burning highly polluting mazut fuel in power plants to compensate for gas shortages has created a public health catastrophe, with air pollution in major cities exceeding WHO safety guidelines by up to twenty times.

Economically, the crisis is projected to cause losses in the tens of billions of dollars annually. As Aljazeera reports, small businesses are particularly vulnerable, with pastry shop owners discarding spoiled products and managers of software companies forced to send employees home during peak work hours.

The constant disruptions threaten livelihoods and could lead to widespread layoffs, further straining an economy already buckling under hyperinflation.

This has fueled public anger and sporadic protests. As documented by The Observer and The New York Times, small but vocal demonstrations have erupted in cities like Babolsar, Rasht, and Sabzevar, with citizens chanting slogans such as "Water, electricity, life – these are our indisputable rights" and "Death to incompetence."

The government’s decision in December 2024 to cut gasoline rations has also stoked fears of a repeat of the deadly 2019 protests, trapping the leadership in a policy bind where maintaining subsidies accelerates economic decline, while cutting them risks widespread social unrest.

Faced with a crisis of this magnitude, the government's solutions, as reported by the Tehran Times, include negotiating water imports from neighboring countries and pursuing diplomatic solutions with Afghanistan over shared river rights.

However, for many Iranians, such measures feel inadequate. They are left to navigate a reality of scarcity and uncertainty, their faith in the government's ability to provide even the most basic services eroding with each power cut and dry tap.

The price hike for electricity, intended as a solution, has instead become another symbol of the disconnect between the state and its people, a people now forced to pay more for less in a nation teetering on the edge of environmental and infrastructural collapse.