Turkey to Gradually Phase Out the Fuel Price Stabilization System
The Turkish government has announced that it will gradually end the temporary fuel price stabilization mechanism, commonly known as the "equalization system" (eşel mobil), which was introduced to limit the impact of rising global fuel prices on consumers.
According to the new schedule, the system will be completely abolished on October 1, following a three-month transition period.
Why Was the System Introduced?
The equalization mechanism was implemented on March 5 as a temporary measure to reduce the domestic impact of geopolitical tensions involving the United States, Israel and Iran, which pushed global oil prices higher.
Instead of allowing fuel prices to rise immediately, the government temporarily absorbed part of the increase by reducing Special Consumption Tax (SCT/ÖTV) and foregoing part of the Value Added Tax (VAT) revenue.
A Gradual Transition
Under the newly announced plan:
- Until July 31, 50% of any fuel price increase will be offset through reductions in the Special Consumption Tax.
- Between August 1 and September 30, the tax relief will decrease to 25%.
- Beginning October 1, the equalization system will be completely discontinued.
This phased approach aims to ease the transition back to normal market pricing.
Taxes Will Also Adjust When Prices Fall
The mechanism also works in reverse.
If global oil prices or exchange rates decline and fuel prices decrease, the Special Consumption Tax will increase by the same amount as the reduction, maintaining balance within the taxation system.
Fuel Prices Will Reflect Market Conditions More Directly
Once the equalization system ends, fuel prices in Turkey are expected to respond more directly to fluctuations in global oil prices and foreign exchange markets.
As a result, consumers could see faster price increases—or decreases—depending on international energy market conditions.
A Return to Standard Tax Policy
The government's decision marks the end of an emergency economic measure introduced during a period of global uncertainty.
Following the transition period, Turkey's fuel pricing mechanism will once again rely primarily on market dynamics rather than temporary tax adjustments.
