Excessive price hikes since the second half of this year have exerted further pressure on the low-paid strata of society.
This is while the Organization in Defense of Consumers and Producers has failed to meet the public demand for inexpensive consumer goods. On the other hand, some state organizations have increased prices of goods and services making life more difficult for a majority of the people.
Experts contend that the organization has ignored consumers' rights, stressing that it must be privatized, should its performance improve.
Hossein Kadkhodaei, an economist and university professor, is of the opinion that the new round of price hikes shows the inflation rate does not jump overnight.
"When prices of detergents and plane fares go up, it means that prices of goods increase gradually," he said, adding that the Organization in Defense of Consumers and Producers and the Council of Economy are acting in such a way that prices would not climb in the short run.
The expert further noted that the country's economic system has been trying to avoid rapid price hikes, adding that liquidity is to blame for the increase in prices of goods and services.
Kadkhodaei said cost management performs poorly in Iran, adding that most state-run production units increase prices of goods and services without previous notice.
"They demand all the additional expenses from the consumers," he said, adding that the Organization for the Protection of Consumers and Producers must protect the consumers against skyrocketing prices.

Liquidity growth plays a crucial role in pushing up prices.

Simple Solution
Iraj Nadimi, a member of the Majlis Economic Commission, says the cut in state subsidies and rise in prices of raw materials in the wake of international developments play a substantial role in fanning price hikes.
He said the government-proposed bill on protecting consumers' rights has been on parliament's agenda in the past several months, expressing hope that the bill would be ratified soon.
"Every country with $20 billion of imports would face problems with its pricing mechanism," he said, adding that in Iran, decision makers prefer simply to increase prices rather than resolving problems that lead to excessive price hikes.
Another lawmaker, Asghar Geranmayeh, accused the Khatami administration of having a hand in price hikes, stressing that the exorbitant prices of consumer goods and services have badly affected the low-paid strata of the community.
A member of the Majlis Plan, Budget and Audit Commission, the MP said the increase in prices of goods and services by state companies have exerted mounting economic burden on the people.
"Price hikes have got out of control in the absence of a strong supervision system," he said, stressing that the government's failure to remove production barriers is also to blame for prices going through the roof.
He said the absence of a proper taxation system and transparent policies have made production an uneconomical business, adding, "High production costs have led to an increase in the prices of final products.
"Another major problem is that some 80 percent of the national economy remains under state control," he said, adding that state managers lack the required capacities, which is the reason that production sector is incapable of offering goods at competitive rates.
"Indeed, the people are paying the price for poor management," he said.

Decision makers prefer to increase prices rather than resolve problems leading to excessive price hikes.

State Role
Some experts are of the opinion that the state sector continues to suffer from mismanagement and that excessive price hikes are the result of the prevailing inefficiencies within the country's management system.
They contend that the ongoing price hikes would lead to a decline in the people's purchasing power.
A decrease in purchasing power will be accompanied by an upsurge in inflation rate and a further liquidity growth.
The Organization in Defense of Consumers and Producers, the Headquarters for Surveying and Controlling Prices and the High Council of Economy are currently in charge of setting prices of consumer goods and services.
Experts say the time has come for the government to avoid interference in pricing mechanisms and transfer the shares of state companies to private ownership.
Utility and transportation sectors are the only sections of the economy that can remain under state control due to their unique structures.
On the other hand, goods produced by the state companies are offered at higher prices than private sector products due to extensive administrative bureaucracies challenging the state sector production.
As long as privatization is not taken seriously in Iran and the state sector remains incompetent, the inflation rate will continue to go up.
Such remarks come amid speculations that private companies are not capable of coping with a possible acceleration in the pace of privatization due to their severe financial crunch and technical inabilities.
Economic officials say the government is prepared to cede the shares of state companies to private ownership far beyond the private sector's financial capabilities.
They say the government does not fund its own companies any longer and they have to mobilize their financial needs via their revenues.

Organization for the Protection of Consumers and Producers must perform more effectively.

Liquidity Growth
Some experts and officials blame price hikes on the liquidity growth.
Deputy Commerce Minister Hassan Younis-Sinaki said recently that liquidity had reached 400 trillion rials, stressing that it is expected to continue to grow over the next months, leading to an increase in the inflation rate and prices of consumer goods.
The official said the campaign against smuggling of goods would disturb the supply of certain items, resulting in an increase in their prices.
He also said that the government has ordered all the state companies to improve their productivity rate, reduce production costs and not to increase prices of their goods and services without the approval of senior officials.
The official said liquidity growth plays a crucial role in pushing up prices, adding, however, that the liquidity growth cannot be blamed exclusively for the increase in the prices of consumer goods.
The government has urged parliament to give the go-ahead for withdrawing money from the Foreign Exchange Reserve Fund for gasoline imports and counterbalancing this year's budget deficit. The Central Bank of Iran, if the initiative is endorsed, will then have to exchange the hard currency withdrawn from the fund for rials on the domestic market, which would lead to an increase in the liquidity and a subsequent rise in inflation rate.
Many parliamentarians are against the initiative. Nevertheless, parliament itself has not yet managed to put forth a better proposal.

Ambiguities about Iran's right over the waters of Hirmand River, which originates in Afghanistan, still exist. This river is very crucial for the inhabitants of southern and southwestern Afghanistan, especially the 400,000 residents of Sistan, who also share commonalities with the people of Sistan on the Iranian side.
However, with the stoppage of its flow in recent years, the people of this region have experienced many problems. In fact, due to the stoppage in the water flow to Iranian borders and the reduction in the regional precipitation levels, Sistan has been grappling with drought.
Hirmand River has a watershed extending over an area of 350,000 square kilometers and is the biggest river in the Iranian plateau. This river originates from Baba Yaghma Mountains in central Afghanistan and after flowing inside Afghan territories for some 700 km, enters Iran, after which it divides into three branches and ultimately flows into Hamoun River.
The stoppage of the flow of Hirmand River has resulted in Hamoun River, which extends over an area of over 4,000 square kilometers, becoming dry. Hamoun River is a divine blessing and the sole source of income for farmers, livestock breeders and fishermen of Sistan.
Currently, people of Sistan hope the day will come when Afghan officials would adhere to the commitment they have towards Iran over the right of use of Hirmand waters in wake of the agreement of 1973. Under this agreement, concluded between the former Iranian and Afghan monarchical regimes, the Afghan government is committed to authorize the flow of 820 million cubic meters of Hirmand waters into Iranian territories. Due to the chaotic developments in Afghanistan over the past decades, this agreement has remained unfulfilled.
About a month ago, Iranian and Afghan delegations examined Iran's rights over Hirmand waters in a meeting in Tehran. The Iranian delegation insisted that the 1973 agreement and especially another agreement that was signed between the two countries during President Mohammad Khatami's visit to Afghanistan some three years ago should be implemented.
Currently, certain areas inside Afghanistan are also facing drought due to the stoppage of flow of Hirmand waters towards Iranian territories.
Let us hope that the Afghan officials will understand that adhering to their commitments would result in economic prosperity for several Iranians and thus help fortify two-way bonds in all areas. The point is that throughout history, Hirmand River has been subject to many upheavals and the prevailing stalemate over the river waters is not new. However, it is clear that Afghans could improve their economic relations with the Iranians of Sistan by letting the Hirmand waters flow once again into Iranian territories.