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- October 13, 202617°
- BIST10012,151-0.94%
- USD49.220.00%
- EUR55.21+0.28%
- GOLD4,197.90+0.17%
- INTEREST37.00%-1.00
- BITCOIN81,724-2.33%
- October 13, 202617°
The fuel price stabilization mechanism will end on October 1
A Presidential Decree published in the Official Gazette will gradually phase out the fuel price stabilization mechanism. While the SCT rate on cigarettes was reduced from 45% to 42%, specific taxes were increased.
A Presidential Decree published in the repeated issue of the Official Gazette decided to gradually phase out the fuel price stabilization mechanism applied to fuel products. Under the decree, the mechanism will be completely abolished as of October 1.
New Regulation on Fuel Price Stabilization Mechanism
According to information obtained from the Ministry of Treasury and Finance, the rates at which changes in domestic refinery prices for products such as gasoline, diesel, LPG autogas and cylinder gas, listed in the (I) numbered schedule annexed to the SCT Law, are reflected in the SCT have been redetermined. Instead of the current 75%-25% ratios, an SCT reduction will be applied at 50% of price increases until July 31, and at 25% between August 1 and September 30. In the event of a decrease in refinery prices, the entire reduction will be reflected as an SCT increase.
Additionally, no D-PPI update will be made for these products for the July-December period of this year. While the fuel price stabilization mechanism that began on March 4, 2026 is considered to have contributed to the fight against disinflation, it is foreseen that the termination will not have a negative impact on inflation, taking into account the diminishing effects of the US/Israel-Iran war and the downward trend in oil prices. The aim is also to eliminate the negative effects of the mechanism on the budget.
SCT Rate on Cigarettes Reduced, Specific Tax Increased
With another Presidential Decree, tax rates on cigarettes were rearranged. While the SCT rate was reduced from 45% to 42%, the minimum specific tax amount was set at 2.2953 lira and the specific tax amount at 23.7404 lira. No D-PPI update will be applied for cigarettes in the July-December period either.
With the regulation, the minimum mandatory increase required for producers to raise prices by 1 lira fell from 3.19 lira to 2.91 lira. The potential revenue loss from the reduction in the ad valorem tax rate will be compensated by the increase in the specific tax per pack. Thus, the aim is to ensure a more balanced change in cigarette prices and to prevent tax revenue loss.
For tobacco products other than cigarettes and alcoholic beverages, a D-PPI rate update will be made for the July-December period.
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