Turkey imposed a 6 percent 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, Reuters reported.
The special consumption tax per liter for fuel has been increased by around 6 percent, 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 five-month cumulative Producer Price Index (PPI) since the last increase standing at 7.12 percent, the latest tax hike is below the index.
Authorities will announce an update on the PPI on January 3, when it is widely expected to increase.
Fuel taxes typically have a major impact on inflation.
But Finance Minister Mehmet Şimşek 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.
Annual inflation in Turkey was 47.1 percent in November, higher than expected but at its lowest level since mid-2023. A Reuters poll forecast that it will ease to 26.5 percent by end-2025, but higher than a central bank prediction of 21 percent.