ANKARA (Reuters) – Turkey imposed a six percent tax hike on fuel on Tuesday after the finance minister said over the weekend that tax moves on fuel and tobacco would not affect the government's inflation target.
The special consumption tax on each liter of fuel was increased by about 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 on the basis of the producer price index. With the 5-month cumulative PPI since the last increase at 7.12%, the latest tax increase is below the index.
The authorities will announce an update to the producer price index on January 3, when it is widely expected to rise.
Fuel taxes usually have a significant impact on inflation.
But Finance Minister Mehmet Simsek said on Sunday that tax increases on fuel and tobacco in the new year will be set in a way that does not affect the country's inflation expectations for 2025.
Turkey's annual inflation rate reached 47.1% in November, higher than expected but at its lowest level since mid-2023. A Reuters poll forecast it would decline to 26.5% by the end of 2025, but higher than the central bank's forecast of 21%.
