Brent crude oil prices, which have fallen over 30 percent in the last five months, have not been reflected in gasoline prices in Turkey accordingly.
The price of the global benchmark for oil has fallen from approximately $116 per barrel in June to a record four-year low of $76.74 last Friday, a 34 percent drop.
Meanwhile, Turkish gasoline prices reached 4.60 TL per liter after the discount on Tuesday midnight, from an average of 5.09 liras per liter in June, making a 10 percent decrease.
The increase in the value of the U.S. dollar against the Turkish lira, taxes on gasoline, costs of refineries and retailers, and the drop in oil prices have not directly reflected the recent discount levels of Turkish gasoline prices.
Although oil-dependent countries, like Turkey, are expected to benefit from lower crude oil prices, the increase in the value of the U.S. dollar has worked against this benefit.
The value of the U.S. dollar, of which the Brent crude oil price is indexed to, rose against the Turkish Lira, from 2.15 in June to 2.24 liras per liter in November.
Thus, the price of Brent crude oil for Turkey, on a national currency level, fell from 1.45 TL per liter in June to 1.08 TL per liter in November, a 10.5 percent decrease.
While the 34 percent drop in crude oil prices does not reflect directly on the 10.5 percent decrease in Turkish gasoline prices, the comparison between the two should be done by excluding the amount of taxes, says a Turkish petroleum expert.
'In Turkey, roughly 60 percent of the gasoline prices are taxes,' says Necati Ilter, the secretary general of the Petroleum Industry Association.
'When we compare the fall in crude oil prices and tax-free Turkish gasoline prices, the decrease in the latter is around 23.5 percent,' he added.
Ilter also stated that other retailer costs, like supervising and auditing, add up to between 0.07 to 0.10 TL per liter of gasoline in Turkey.
- Regulator's warning
On Monday, the Turkish energy market regulatory board, EPDK, asked gasoline retailers in the country to adjust their prices according to the legal regulations.
The energy watch-dog noted that gasoline retailers in Turkey are keeping their prices above the stated rules and regulations, in order to keep their profit margins high.
According to EPDK's Oil Market Pricing Report for October, the amount of tax for 95-octane gasoline price was 2.91 TL per liter, constituting 60 percent of the 4.81 TL per liter sale price.
By Baris Saglam and Ovunc Kutlu
Anadolu Agency