While global gas prices fall dramatically, Turkey’s remain high

While global gas prices fall dramatically, Turkey’s remain high

While global gas prices fall dramatically, Turkey’s remain high While gasoline prices have decreased by an average of 60 percent around the world between June 2014 and January 2016 amid a plunge in oil prices, Turkish gas prices have only dropped 16 percent due to a loss in the Turkish Lira’s value and higher taxes as well as low shares of raw materials in fuels, according to sector representatives. 

Petroleum Industry Association Secretary General Niyazi İlter said any ups and downs in crude prices have not directly affected pumping prices in Turkey. 

“While gasoline prices have seen an average of 60 percent of decline between Jun 2014 and January 2016 in global markets, Turkey has seen around 16 percent of decline. In addition to the parity and fixed tax rate effects, the limited share of raw materials in fuels, measuring at around 25-30 percent, have also played a role here,” he said in an interview with Anadolu Agency. 

Crude prices declined by 74 percent between June 2014 and January 2016. 

He noted that crude oil prices and gasoline or diesel prices cannot be directly associated with each other as each has separate markets. 

İlter noted that Turkey ranked fourth in terms of fuel taxes after Britain, Italy and Sweden as of 2014. 

“The main problem is not how high these taxes are, but the quality of taxes. I mean as these taxes are fixed, the share of taxes in fuel prices rises when prices decline. This is also a big problem in Europe,” he said. 

İlter said the fuel sector reached 120 billion Turkish Liras in volume in 2014 with around 63 billion liras of taxes, underlining the importance of such taxes in fueling the economy. 

“The sector is estimated to have grown by 12 percent in 2015 compared to the previous year,” he said. 

He noted that Turkey has been compared with the four following countries in setting fuel prices: Britain, Germany, France and Italy. 

“However, we believe that any direct comparison is not appropriate as these countries differ from each other so much. Besides, counterfeit and smuggled fuels are very common in Turkey and the sector has been fighting against this problem, which brings about additional costs. All of these factors need to be considered when making comparison. We are working on these issues with the energy watchdog, EPDK [Energy Market Regulatory Authority],” he said.