Türkiye will gradually phase out its fuel tax adjustment mechanism by October, scaling back a measure introduced to cushion consumers from soaring oil prices during the Iran war.

The government activated the so-called sliding-scale system in March, allowing reductions in the special consumption tax (ÖTV) to offset increases in global oil prices and limit their impact on domestic fuel prices and inflation.

Under the scheme, the government absorbed up to 75% of fuel price increases by reducing the excise tax, helping to contain the inflationary effects of oil prices, which rose by more than 50% during the conflict.

According to a presidential decree published in the Official Gazette on Friday, the tax relief will be reduced in stages before the mechanism is fully abolished.

The forgone excise tax will be capped at 50% of fuel price increases through the end of July, before being lowered to 25% during August and September.

The decree also stipulates that if refinery prices decline, the government will fully restore the corresponding amount of excise tax, rather than restoring only 75% as under the previous system.

The revised rules took effect immediately, while the sliding-scale mechanism will be terminated on Oct. 1.