The Cabinet decision was published in the Official Gazette on Friday. It follows an earlier decision by Turkish fuel distributors to decrease the pump price of 95 octane gasoline by tl 0.09 to TL 0.10 per liter on May 8. The decision comes amidst growing criticism against the government for failing to reflect global oil price changes on prices at the pump.
Oil prices fell to nearly $92 a barrel on Friday in Asia, extending a sharp two-week sell-off. Brent crude for July delivery was down 60 cents at $106.89 per barrel in London on Friday. The Cabinet decision decreases the ÖTV on 95 octane unleaded gasoline from TL 1.89 to 1.87, while the ÖTV on diesel fuel is lowered to TL 1.29 from the previous TL 1.30. Although very slight changes, these tax decreases spell possible similar future decreases as consumer criticism weighs on authorities, observers argued.
The major blame is put on fuel retailers, who are notorious for their alleged price gouging. The state is also held responsible for high prices by many consumer unions. In a bid to promote relatively greater competition, the state withdrew from fuel markets at the end of 2004. The market was left to private fuel retailers, who opted to increase their profit margins, while a fair price determination mechanism has yet to be established.