Turkey's Energy Market Regulatory Authority (EPDK) Tuesday warned gasoline distributor companies that their price margins were too high and the watchdog would have to step in unless prices are reduced.
The EPDK statement said the profit margin of dealers and distributors has risen significantly in recent months during the coronavirus pandemic to a level that hurts consumers and creates competitive market disruption. The regulator warned it would need to impose a price ceiling if price margins were not lowered.
The energy watchdog emphasized that it does not normally impose price caps and that prices are set in free-market conditions but “it reserves the right to interfere if the volatility in fuel prices disrupts competition and negatively impacts consumers.”
Gasoline and diesel fuel prices in Turkey’s domestic market change depending on three factors: the product prices on international markets, the refinery, distributor and dealer margin, and the value-added tax (VAT) and special consumption tax (SCT).
Fuel prices in Turkey have been changing almost every day since the beginning of the oil price crisis in international markets caused by the reduction in global demand due to the pandemic. According to the official data, the liter price of gasoline and diesel fuel in the country has changed 36 times between March 10 to the end of April.
EPDK Chairman Mustafa Yılmaz said the distributor and dealer margin hikes observed across Turkey are too excessive to be explained by a rise in costs or some other change.
Yılmaz said all players in the industry should play by the rules, “Otherwise, we will not hesitate to take the necessary steps. Either companies will bring down prices to a reasonable level or we will impose a price ceiling.”
