Turkey hikes fuel tax by 6%, aims to control inflation
2024.12.30 21:54
ANKARA (Reuters) – Turkey imposed a 6% tax hike on fuel on Tuesday, after its finance minister said over the weekend that tax moves on fuel and tobacco would not affect the government’s inflation goal.
The special consumption tax per litre for fuel has been increased by around 6%, according to a presidential decree in the Official Gazette, which publishes new legislation and official announcements.
The special consumption tax on fuel is adjusted every six months based on the producer price index. With the 5-month cumulative PPI since the last increase standing at 7.12%, the latest tax hike is below the index.
Authorities will announce an update on the PPI on Jan. 3, when it is widely expected to increase.
Fuel taxes typically have a major impact on inflation.
But Finance Minister Mehmet Simsek said on Sunday that tax hikes for fuel and tobacco in the New Year will be set in a way that does not affect the country’s 2025 inflation outlook.
Turkish annual inflation stood at 47.1% in November, higher than expected but at its lowest level since mid-2023. A Reuters poll forecast that it will ease to 26.5% by end-2025, but higher than a central bank prediction of 21%.
