RENEE MONTAGNE, host:
This is MORNING EDITION from NPR News. I'm Renee Montagne.
LINDA WERTHEIMER, host:
And I'm Linda Wertheimer in for Steve Inskeep.
Iran often seems to be in turmoil. Yet for all the turbulence over the years, the country's rulers have kept prices for basic goods relatively low and stable. Price controlling subsidies were considered an important buffer against unrest. But now President Mahmoud Ahmadinejad has lifted the subsidies for those goods and prices are skyrocketing. Serious rifts now appear to be opening between the president and other powerful figures in Iran.
NPR's Mike Shuster has more.
MIKE SHUSTER: There are significant differences among conservatives in Iran over many issues, but right now the focus is on economic subsidies. The price of basics in Iran - like bread, electricity and gasoline - has been heavily subsidized for decades. But when Mahmoud Ahmadinejad ordered the removal of subsidies two weeks ago, the price of gasoline quadrupled and the price of bread tripled overnight. What's more, Ahmadinejad moved to seize the revenues that would have been used for subsidies for his own purposes. He has begun paying the poorest segments of Iranian society to help mitigate the pain of the price hikes.
Some estimate the value of the revenues saved at $100 billion, says Abbas Milani, director of Iran studies at Stanford University.
Professor ABBAS MILANI (Stanford University): They are taking the equivalent of $100 billion out of the economy that helped subsidize people's livelihood and giving back a pittance. They are giving back the equivalent of $40 per person.
SHUSTER: Conservatives in the parliament wanted to control these funds, but Ahmadinejad quickly recognized their enormous political value, says Milani.
Prof. MILANI: Basically, Ahmadinejad has created an enormous system of patronage for himself that he will use to either prolong his own stay in power or put one of his cronies in presidency.
SHUSTER: And that's not to speak of the powerful surge in inflation that is expected to hit Iran in the coming months.
Ahmadinejad's move appears to be part of a wider plan to enhance the powers of his own presidency at the expense of Iran's Supreme Leader, Ayatollah Ali Khamenei. That's according to Muhammad Sahimi, who writes for the website Tehran Bureau.
Mr. MUHAMMAD SAHIMI (Columnist, Tehran Bureau): He wants to act independent from Ayatollah Khamenei and he wants to consolidate the power in the office of the president.
SHUSTER: One example of this was Ahmadinejad's recent firing of Foreign Minister Manouchehr Mottaki while he was on a foreign trip. Foreign policy has always been the jurisdiction of the supreme leader. Mottaki was the Supreme Leader's man, says Omid Memarian, who writes on Iranian affairs for the Inter Press Service.
Mr. OMID MEMARIAN (Inter Press Service): He had the support of the parliament, and also he had the support of the Supreme Leader. I talked with different sources and Ahmadinejad dismissed the foreign minister without the approval of the supreme leader.
SHUSTER: Apparently in retaliation, the Supreme Leader's camp recently resurrected charges of corruption and abuse of power against one of Ahmadinejad's vice presidents, and against his chief of staff. In response, Ahmadinejad has become more openly critical of the power of the ayatollahs. A clever move, in Muhammad Sahimi's view.
Mr. SAHIMI: He realizes that the Iranian public is tired of the clerics. So by being opposed to clerics and also talking about, for example, Iranian culture rather than Islamic culture, that invokes Iranian nationalism rather than Islam, he has tried to create and gather some support among some segments of the society. So that's a shrewd tactic on his part.
SHUSTER: There is one area where the two conservative camps have maintained common purpose - the repression of the opposition. In recent weeks, a well-known filmmaker has been jailed for six years just for planning a movie about the opposition. An economist has been imprisoned for questioning the accuracy of economic data released by the government. And earlier this week, two people were hanged in Evin prison, one an alleged spy for Israel.
All of this is an indication of just how uneasy Iran's leaders continue to feel, says Abbas Milani.
Prof. MILANI: I think they know full well what the population wants, how disgruntled the population are, how worried the people are about the economic situation.
SHUSTER: And this is likely to have a significant impact on the still somewhat hidden tensions between the president and the Supreme Leader, says Omid Memarian.
Mr. MEMARIAN: We have to see now how the Supreme Leader reacts to Ahmadinejad's reckless policies, because at the end of the day, the Supreme Leader wants to survive. And if Ahmadinejad is endangering that kind of survival, then, you know, he has to go too, like many others.
SHUSTER: There is even talk of impeaching Ahmadinejad, but so far no serious move to carry out that threat.
Mike Shuster, NPR News.