Minister Şimşek's 'if we hadn't implemented the system, diesel would be 90 liras' remark: The increase would have been much more dramatic

Şimşek made evaluations regarding the economy and energy agenda during a live broadcast on TRT Haber. Emphasizing that Turkey has no issues with energy supply and procurement despite the global energy shock, Şimşek stated that the sliding-scale system (eşel mobil) applied to fuel has curbed prices and inflation.

Pointing out that the global economy is experiencing a major energy shock due to the impact of wars in the region, Şimşek stated that Turkey does not have a problem regarding energy supply. Noting that Turkey's dependence on the Strait of Hormuz is at a very low level, Şimşek noted that the major supply shock in the world would also affect Turkey, and that the increase in oil prices would cause an additional deficit in the external balance and lead to inflation.

"If it weren't for the sliding-scale system, diesel would be 90 liras"

Stating that they did not reflect a significant portion of the shock to citizens, companies, and tradespeople thanks to the sliding-scale system they implemented by waiving the fixed SCT (Special Consumption Tax) on fuel products, Şimşek explained the system's effect on pump prices with the following data:

If it weren't for the sliding-scale system, a liter of diesel, which would be 90 liras today, is currently below 73 liras.

The liter price of gasoline would also have been approximately 79 liras if it weren't for the sliding-scale system; it is currently around 65 liras.

Şimşek stated that if the sliding-scale system had not been implemented, the increase in inflation would have been much more dramatic, and if the increase in crude oil prices had been reflected directly in pump prices, inflation would have reached higher levels. Minister Şimşek expressed that this step is essentially a sacrifice made to protect the purchasing power of citizens and the country's competitiveness.

The annual cost of the system to the budget could reach 600 billion liras

Touching upon the effect of the sliding-scale application on the budget, Minister Şimşek announced that the cost of the application in the first two months was 90 billion liras, or 2 billion dollars. Şimşek added that if a similar situation continues throughout the year, the impact would be around 600 billion liras, which corresponds to a figure of 13-14 billion dollars at today's prices. Şimşek also emphasized that this system could be implemented thanks to the discipline established in the budget, savings in the public sector, and efforts to increase revenues.

News Source: 12punto