Fuel prices in Türkiye jump up after a shocking tax increase

Fuel prices in Turkey have increased in various provinces and major cities, following the publication of the government’s decision to increase the tax on fuel products such as gasoline and diesel.

Today, Sunday, July 16 (2023), the Official Gazette published the text of the government’s decision to raise the private use tax on fuel products, according to reports published by “Turkey News” newspaper in its account on the “Telegram” website, which was viewed by the specialized energy platform.

The increases in the fuel tax in Turkey jumped dramatically, as the government raised the tax on a liter of gasoline from 2.52 liras ($0.038) to 7.52 liras ($0.29), while raising the tax on a liter of diesel from 2.05 liras ($0.078) to 7.05 liras ($0.078). $0.27).

Fuel tax in Türkiye

Turkish expert and financial analyst, Dr. Mukhlis Nizar, explained that the government resorted to increasing the fuel tax in Turkey, as a method usually used to increase the revenues coming to the state on the one hand, and reduce the demand for cars on the other hand.

Nizar explained, in a tweet he posted on his Twitter page, that this step could cause a sharp rise in the inflation rate in the country, pointing out that the best behavior was to divide this tax into segments, according to the types of cars and the date of manufacture.

He pointed out that this method of “segmentation” in this case will target the rich and the poor without discrimination, expecting that the current increase will lead to an increase in the rate of inflation in a country that has been suffering economically from the beginning, according to the tweet monitored by the specialized energy platform.

The Turkish government had announced that the increase in fuel tax aims to increase state revenues and income from this important sector, which is the financial revenues that it intends to direct to a number of development and service projects in the country.

Sudden rise in fuel prices

After the government announced the tax hike, on the evening of Saturday, July 15, fuel prices in Turkey witnessed a significant increase, according to data published by the “Dovar” website, which was reviewed by the specialized energy platform.

Gasoline and diesel prices rose in Ankara, Istanbul and Izmir in varying proportions, at a time when reports revealed varying rates of rise according to each region, at the expense of the company supplying fuel products for each city or province.

Fuel prices in Türkiye’s main cities are as follows:

Ankara:

• Gasoline: 34.53 pounds per liter.
• Diesel: 32.82 pounds per liter.

Istanbul:

• Gasoline: 33.97 pounds per liter
• Diesel: 32.26 pounds per liter

Izmir:

• Gasoline: 34.54 pounds per liter
• Diesel: 32.93 pounds per liter

(One US dollar equals 26.17 Turkish liras)

Consumption tax on gas

The government’s decisions included increasing the consumption tax on fuel in Turkey, raising the special consumption tax on natural gas, as the tax on a cubic centimeter of gas consumed in homes was raised from 0.023 liras to 0.0747 liras.

Turkish tax expert Ozan Bingol said, in a tweet on Twitter, that the tax on natural gas used in homes has tripled during the current year, pointing out that the new increase, by the presidential decision issued today, pays the value-added tax rate on gas. to 20%.

It is noteworthy that Turkey is witnessing a huge economic crisis in recent months, which culminated in an increase in the deficit in the current account balance last May 2023 to $7.93 billion, according to data published by the Turkish Central Bank, which was seen by the specialized energy platform.

Reuters had conducted a poll during the month of July, before announcing the results of the deficit in the current account balance in Turkey, and expected it to reach only 7 billion, although the deficit was recorded last April at 5.42 billion dollars.