By Babak Kamiar & Euronews Persian
Published on
10/09/2026 – 12:29 GMT+2
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In a Euronews exclusive, Euronews Farsi spoke with drivers, small business owners and salaried workers about life in an economy where fuel prices doubled overnight, and people can no longer afford basic food items.
Six months after the war between the US and the Islamic Republic of Iran erupted, the economic fallout inside Iran has reached a severe and unprecedented intensity.
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While ordinary citizens previously weathered decades of international sanctions, the combination of ongoing war and a reinstated US naval blockade has paralysed everyday life, plunging the national currency into a historic tailspin and forcing families into drastic household austerity.
On Wednesday, US President Donald Trump reiterated Washington’s stance while boarding Air Force One for a trip to Dallas.
“They’re in very bad shape. Their country is destroyed now,” Trump told reporters. “As you probably saw by the numbers, they have 300% inflation.”
According to Iran’s free currency market data, the Iranian rial continued its sharp decline, falling from around 1.45 million rials per US dollar in March 2026 to over 2.1 million rials by early September.
The economic shockwaves have hit the currency market hard over the past 10 days. By Thursday, the free-market exchange rate for the US dollar comfortably breached 234,000 tomans (2.34 million rials), while the euro soared to an all-time high of 273,000 tomans (2.73 million rials).
Iran’s official currency is the rial, although most Iranians conduct everyday transactions in tomans — a colloquial unit equal to 10 rials. Shops, restaurants and property listings quote prices almost exclusively in tomans.
This marks a further decline since early September, when the rial had already lost over 63% of its value against the dollar since March, when Iran’s Central Bank Governor pledged a $2 billion liquidity injection while conceding that spiralling inflation was placing “heavy pressure on people’s livelihoods.”
Domestic corruption and doubling of fuel prices
While Tehran frequently attributes the economic crisis entirely to external pressure, some domestic political figures acknowledge structural failures at home.
Hassan Ghashghavi, spokesman for the Iranian Parliament’s National Security and Foreign Policy Commission, admitted that internal mismanagement remains the primary driver of the crisis.
“Regarding the economy, we must look inward. Injustice — especially in distribution and the concentration of wealth within a tiny elite compared to the vast majority — alongside widespread financial corruption and factional self-interest, impacts our economy far more than the United States does,” Ghashghavi said.
“Surveys conducted before and after the 12-day conflict (with Israel in June 2025) show that while severe blockades exist, roughly 35% to 65% of our national economic problems stem from domestic issues,” he added.
“Lack of planning, failure of the three branches of government to perform their duties properly, and internal missteps account for a significant share. Only about 35% of the problems are rooted in foreign policy and US sanctions.”
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Compounding the hardship, the government implemented a sudden 100% increase in fuel prices on Tuesday.
Under the new rationing framework, vehicle owners receive a monthly allowance of 60 litres at 1,500 tomans per litre, and an additional non-subsidised tier of 50 litres at 3,000 tomans per litre.
Any consumption beyond that quota jumps to 10,000 tomans per litre. Fuel cards are strictly tied to individuals, meaning households owning more than one vehicle receive only a single monthly allowance.
Eyewitnesses across several major Iranian cities reported a heavy security presence at gas stations to preempt potential civil unrest following the price hike.
Although the new price of 10,000 tomans per litre—which comes out to a fraction of a euro—may still seem relatively low compared with other essential goods and commodities, the increase is particularly sensitive in Iran because fuel prices have historically been closely linked to protests and social unrest.
In practical terms, when your monthly income is around €100, even 4 euro cents a litre can feel expensive, especially in a country with vast oil reserves.
One telling comparison is the price of bottled water. A 1.5-litre bottle of mineral water currently sells for around 20,000 tomans or more — leading Iranians to joke online that it would actually be cheaper to drink petrol than water.
Drivers squeezed by inflation and fixed fares
The surge in fuel costs and operating expenses has crippled Iran’s gig economy, particularly ride-hailing services like Snapp and Tap30 — Iran’s local equivalent of Uber.
Mehdi, a full-time Snapp driver in Tehran, told Euronews Farsi that driving eight hours a day covers roughly 200 kilometres and generates about 65 million tomans (€236) per month on paper.
However, company commissions, fuel, oil, and heavy vehicle depreciation immediately wipe out nearly 30 million tomans (€109), leaving him with a net monthly income of just 35 million tomans (€127).
“With the fuel price increase, fares should logically rise by 30%, but Snapp refuses to adjust them because passengers simply can’t afford it and would revert to traditional taxi agencies,” Mehdi explained.
“The number of active drivers on Snapp is shrinking fast because the rates no longer cover costs. Some drivers ask passengers to transfer payments directly via card-to-card to bypass the app’s rates, but most passengers report these requests to the company.”
For drivers like Mahmoud, who worked for Tapsi, the outbreak of active military conflict effectively halted business altogether. During the 40 days of active war and for weeks following the ceasefire, passenger requests plummeted.
“Fares picked up slightly by early summer — a trip from Aryashahr to Sattarkhan ran about 120,000 tomans (€0.43), and a cross-town trip from Dowlat Street to Sepah Square fetched 300,000 tomans (€1.09),” Mahmoud told Euronews Farsi.
“But food prices are rising far faster than ride fares. Drivers don’t set the prices — corporate management does.”
Struggling to buy a bag of rice
Even for middle-class workers with relatively stable corporate incomes, purchasing power is evaporating faster than wage increases.
Samaneh, an employee at a private energy conglomerate specialising in oil, gas, and solar power, told Euronews Farsi that while her company maintained regular payroll and granted a decent raise this year, galloping inflation rendered the increase meaningless within weeks.
“In the first two months of the year, my salary was sufficient, but soon I had to start cutting out basic items,” Samaneh said.
“Just two months ago, 18 million tomans (€65) would cover a month’s supply of chicken, meat, and basic hygiene products. Today, that same amount doesn’t come close,” she explained.
“I’ve had to switch to lower-quality goods, buying bruised fruit or purchasing meat from municipal wholesale markets just to get by.”
“Someone earning a base salary of 30 million tomans (€109) who also pays rent simply cannot afford basic food items anymore, even at the lowest quality,” Samaneh concluded.
The crisis is even more pronounced for retirees living on fixed pensions. Ladan, a retired high school teacher in Kerman, explained that a veteran educator earns roughly 25 million tomans (€90) per month after taxes and insurance deductions.
To make ends meet, many teachers work extra shifts at private schools, pushing maximum combined household incomes to around 50 million tomans (€181), an amount she says is barely enough for two people, let alone families supporting university-aged children.
“I used to go to hypermarkets and comfortably buy two 10-kilogram bags of rice. Now I struggle to buy just one,” Ladan told Euronews Farsi.
“Last night, a medium-quality bag of Iranian rice cost me 4 million tomans (€14.50). I paid half using my government welfare credit card (Kalabarg) and paid the rest out of pocket,” he added.
“We no longer travel, we’ve stopped hosting dinner parties, and I’ve switched from liquid detergent to cheap powder.”
“I don’t know if the government will fall or not,” Ladan explained, reflecting on the state of the nation. “But with this economic situation, the country is falling apart.”
Small businesses hit by collapsing demand
The severe drop in consumer purchasing power has hit small business owners in suburban areas particularly hard, where rising ingredient costs have completely erased any profit.
Hashem, who runs a fast-food shop in a working-class town near Tehran, noted that the price of essential ingredients has skyrocketed since the war began.
Pizza cheese has jumped from 180,000 tomans per kilogram to 750,000 tomans (€2.72), while premium cheese now reaches 880,000 tomans (€3.20).
Single-serve condiment packets rose from 700 tomans to over 8,300 tomans each, and basic sandwich wrapping paper tripled in price.
“I used to sell a basic pizza for 130,000 tomans, and now I have to charge 300,000 tomans (€1.09),” Hashem explained.
“Our daily cash flow looks higher on paper because prices are inflated, but our actual profit margin has been cut in half while my customer base has plummeted by 50%.”
Hashem believes that if economic conditions continue to deteriorate, renewed civil unrest is inevitable despite the heavy risk of state repression.
“People are hungry,” Hashem said. “And when people are starving, nothing else matters to them.”
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