Türkiye announced on Tuesday it would impose a 6% tax hike on fuel, after its finance minister said over the weekend that the adjustments 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 five-month cumulative producer price index (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 Treasury and 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.
Türkiye’s annual inflation stood at 47.1% in November, its lowest level since mid-2023. Official data on Friday is likely to show it ended the year at 44%-45%, according to the central bank and officials.
The country’s central bank sees it easing to 21% by the end of 2025.
