The risk of a new increase in fuel prices due to taxes, exchange rates and oil prices came to the fore in November.
Economist Mahmut Aydoğmuş stated that the SCT increases, which are expected to come into force on November 1, may be reflected in pump prices as 3.60 TL for diesel and approximately 4.15 TL for gasoline.
According to Aydoğmuş, if the depreciation of the Turkish Lira continues and the risk of war in West Asia increases again, the cost pressure on fuel may not be limited only to the tax increase.
'WE WILL SEE THE FIRST BLOW IN PUMP PRICES'
Stating that three main risks await fuel prices in November, Aydoğmuş said, "If the tax increase becomes final, we will see the first blow on pump prices. However, the exchange rate and the course of Brent oil may turn this increase into a much heavier bill."
TAX IMPACT OF 3.60 TL ON DIESEL AND 4.15 TL ON GASOLINE
Aydoğmuş calculated the possible impact of the SCT change, which is expected to be implemented on November 1, on pump prices as follows:
"The SCT, which is currently 6 TL per liter on diesel, will increase to 9 TL as of November 1. This means a tax increase of 3 TL. With the 20 percent VAT effect, the reflection on the liter price of diesel will be 3.60 TL.
The SCT, which is 8.90 TL for 95 octane gasoline, is expected to increase to 12.36 TL. "The difference of 3.46 TL means an increase of approximately 4.15 TL, including VAT."
Aydoğmuş pointed out that possible price increases may affect not only vehicle owners, but also transportation, agriculture, industry and food prices through costs.
50.71 TL SCENARIO FOR THE DOLLAR
Stating that the second risk in terms of fuel prices is the exchange rate, Aydoğmuş said that if the depreciation of the Turkish Lira accelerates, the cost of imported energy may increase further.
Aydoğmuş said, "In the first nine months of the year, the average monthly increase in the dollar exchange rate was approximately 1.65 percent. Four days before the end of October, the increase reached 1.75 percent. The current trend indicates that the monthly increase may exceed 1.80 percent."
Stating that if the current trend continues in November, dollar/TL may reach 50.71 at the end of the month, Aydoğmuş emphasized that this is a scenario.
'ADDITIONAL COST DUE TO EXCHANGE EXCHANGE MAY REACH 2.50 TL'
Stating that since Turkey meets most of its oil needs through imports, the increase in the exchange rate may affect pump prices even if the international oil price does not change, Aydoğmuş made the following assessment:
"Under our current assumptions, we calculate that the additional cost due to exchange rate can reach approximately 2.50 TL per liter, including VAT on imports. In other words, even if the international price of oil remains constant, we may encounter new increases due to exchange rate."
RISK OF OVER 120 DOLLARS IN BRENT OIL
According to Aydoğmuş, one of the biggest uncertainties in terms of fuel prices is the geopolitical developments in West Asia.
Stating that the possibility of rising tensions between Iran, Israel and the USA after the midterm elections to be held in the USA on November 3 should be monitored in terms of energy markets, Aydoğmuş drew attention to the difference between futures and physical oil prices.
Aydoğmuş said, "We need to distinguish two separate prices in the oil market. The Brent oil price we see on the screens is the price of the nearest futures contract. While this price is in the range of 110-111 dollars, spot prices in the physical market are at the level of 125 dollars."
Arguing that Brent futures prices could rise above 120 dollars if a possible new military conflict affects oil production and shipment, Aydoğmuş said that such a situation could create a serious increase in Turkey's energy import costs.
'WE ENTER THE MONTH OF NOVEMBER WITH THREE SEPARATE RISKS'
Stating that the upward movement of tax, exchange rate and oil prices in the same period may create a combined pressure on fuel prices, Aydoğmuş said:
We are entering November with three separate risks. The first is the SCT increase on November 1. Secondly, there is the possibility of accelerating the depreciation of the Turkish lira. Third, and perhaps most importantly, the impact of the war that may escalate again in the Middle East on oil prices.
Aydoğmuş shared his calculation that only the tax and exchange rate effects could create a price pressure of approximately 6 TL for diesel and 6.55 TL for gasoline.
'FUEL INCREASE IS SPREADING TO THE WHOLE ECONOMY'
Aydoğmuş also pointed out the impact of possible price increases in fuel on inflation and said:
