Nov 08 2017

Petrol taxes raise cost of living for Turkish workers

ANKARA - To buy one litre of petrol, a Turkish worker must work three times longer than a worker in neighbouring Greece.

Numerous new taxes on petrol in Turkey have resulted in significant hardship for drivers, lifted fuel inflation and reduced people’s purchasing power.

Turkey’s government calls the increases a price adjustment, but opposition parties says it is a tax.

The government says the Energy Market Regulatory Agency (EPDK) automatically adjusts prices, and falls in the lira lead to higher prices in oil, which is purchased in dollars, and to refined products. The Treasury, in order to ensure there is no decrease in tax revenue, raises tax rates on petrol and prices go up more.

There are two taxes on gasoline, a personal consumption tax and a value added tax (VAT). Gasoline is one of the categories in which the greatest tax revenue is collected.

Liquid Natural Gas (LNG), tax inclusive, is 32 percent more expensive in Turkey than in the Europe Union. At the same time, tax inclusive gasoline in Turkey is 40 percent more expensive than in the EU. According to EPDK, drivers in Turkey pay more than those in all EU countries for fuel.

While the per capita income in EU countries is $36,500, in Turkey, it is only $10,850.

The EU per capita income allows one to buy 23,850 litres of gasoline, 26,450 litres of diesel, and 52,900 litres of LNG. With Turkey’s per capita income, a person can buy 7,140 litres of gasoline, 8,100 litres of diesel, and 12,000 litres of LNG.

In the EU, a person can buy three times the gasoline and diesel and four times the LNG than one in Turkey. In 1996, the cost of gasoline was only $0.3 per litre. Now, it is $1.52 per litre, an increase of over 500 percent.

In Greece, someone earning the minimum wage, will work for 18 minutes to purchase one litre of gasoline. In Turkey, the same worker has to work 43 minutes to buy the same amount.

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