Turkey bids farewell to ‘cheap’ gas

Turkey bids farewell to ‘cheap’ gas

Turkey bids farewell to ‘cheap’ gas

The EPDK had limited and reduced the total share of dealers and vendors in a liter of gasoline and diesel oil to 37 kuruş but the practice end tomorrow.

The ceiling price imposed on the Turkish fuel market expires tomorrow, but some analysts warn of the price volatility risks ahead of the sector due to tense regional politics.

The Energy Market Regulatory Authority (EPDK) had set a two-month period to implement upper limits on gasoline and diesel fuel prices in the sector and the ceiling will be implemented tomorrow for the last time.

Turkey’s energy watchdog had announced its decision to introduce a ceiling fuel prices on March 21, stepping up efforts to control the soaring prices in the market.

Volatility concerns

Some analysts have been warning the ceiling price implementation has brought relative stability to the sector, shielding it partially from the global oil price changes.

Energy Specialist Cemil Ertem told Anadolu Agency that persistence of the practice would support consumers, particularly amid rising fragilities stemmed from tense domestic politics and the Ukraine crisis.

“First, we will see volatilities in oil prices stemming from the Russia crisis. Moreover, the foreign exchange rate environment will not be able to stabilize due to the presidential elections,” Ertem said, stressing volatile currency rates will also directly affect oil prices.

The EPDK had limited and reduced the total share of dealers and vendors in a liter of gasoline and diesel oil to 37 kuruş.

Due to the EPDK decision, a liter of gasoline derivatives are sold with a 13 kuruş average reduction, while the reduction per liter was 30 kuruş for diesel derivatives.

The EPDK made the decision after concluding there is a large discrepancy between the prices in the Turkish market and “the closest accessible oil market prices.”

According to the regulations, fuel prices in Turkey should be determined in accordance with the “Mediterranean Curve” countries.

The gap between diesel oil prices was 45-46 kuruş before the ceiling’s introduction, while the difference in gasoline prices used to reach up to 52-53 kuruş. 

The EPDK decided how to calculate ex-refinery prices, fuel distribution prices and fuel vendor prices and announced the updated ceiling on every Tuesday and Friday on its website.

Turkey has been one of the countries with most expensive fuel prices. In a report released in March,   the main opposition Republican People’s Party (CHP) said lofty tax burdens have caused the price of gasoline to skyrocket over 210 percent during the 11-year Justice and Development (AKP) rule.