ANKARA (Reuters) – Turkey introduced a 6 percent fuel tax hike on Tuesday, after its finance minister said over the weekend that tax changes on fuel and tobacco would not affect the government’s inflation target.
The special consumption tax per liter of fuel has been increased by about 6%, according to the presidential decree in the Official Gazette, which publishes new laws and official announcements.
The special tax on fuel consumption is adjusted every six months based on the manufacturer’s price index. With a 5-month cumulative PPI since the last increase of 7.12%, the latest tax increase is below the index.
The authorities will release an update on PPI on January 3, when it is expected to rise.
Fuel taxes tend to have a big impact on inflation.
But Finance Minister Mehmet Simsek said on Sunday that fuel and tobacco tax increases in the new year would be set in a way that would not affect the country’s inflation outlook for 2025.
Turkey’s annual inflation was 47.1% in November, higher than expected but at the lowest level since mid-2023. A Reuters poll predicted it would ease to 26.5% by the end of 2025, but higher than the central bank’s forecast of 21 %.
