Turkey: Weaker lira about to unleash double-digit prices in fuel stations
Sites are preparing to face an unprecedented challenge after the slump and the end of tax rebates.
Turkish gas stations are bracing to deal with an unexpected challenge unleashed by the recent weakening of the lira. Prices on fuel are close to reaching double-digit numbers at pumps, an unprecedented scenario for the country’s industry.
The currency has registered its worst performance in the past month, losing 7.5% against the dollar and accumulating a 23% loss over the year, according to a Bloomberg report. Fuel prices are still in one digit but the possibility of reaching two-digit prices is higher by the day.
In addition to the fall of the lira, the Turkish government has confirmed the end of tax rebates. The monthly report from the Treasury & Finance Ministry showed a $4.8 billion investment of tax income from fuel sales to keep pump prices lower.
Last Friday, the media company reported a record low for the currency of 9.6625 per dollar, a 1.5% loss due to the recent interest-rate cut that was higher than expected. This exacerbates the already difficult situation in the country, which also has to deal with the global rise of crude oil prices as well.
After an approximate increase of 10% for gasoline and 24% for diesel in 2021, prices are coming closer to the “10” mark, based on a calculation by Opet. Currently, gasoline is sold for around 7.90 liras per liter, while diesel goes for 8.20, last one being the most popular of the two for customers. Companies are currently studying which of their outlets across the country need to be updated with the possibility of double-digit prices in mind.
