ranian President Hassan Rouhani delivers a message for the Iranian New Year, or Nowruz, in Tehran, Iran, March 20, 2014.(AP Photo/Office of the Iranian Presidency)
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Looming fuel price rises in Iran will be the first major test of President Hassan Rouhani's ability to retain public support in the face of attacks from his hard-line rivals.These successes could be threatened if Rouhani's government mishandles planned cuts in massive state subsidies that keep domestic prices of gasoline and other fuels far below global levels.The official inflation rate rose above 40 percent under Ahmadinejad; Rouhani has said bringing it down is a priority, and the rate has dropped below 35 percent as his administration has introduced more conservative monetary and fiscal policies.The Tehran-e Emrouz daily predicted last month that the average price hike for gasoline, diesel and other fuels might be around 87 percent, saving the government $9.9 billion annually.Media reports suggest the fuel price hikes could occur in June or July, though the government might wait until after late July, when it hopes to reach a nuclear deal with the West.
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