“Diesel will be 1 lira!” In the days when the promise was spoken, we suddenly said, “Diesel has exceeded 30 liras!” We found it in the days we said. So how did diesel end up being more expensive than gasoline?
First of all, we have heard the name of Brent OilLet’s talk briefly about what it is; This type of crude oil, which is extracted from the North Sea and whose barrel is accepted as an international standard, is an indicator in the formation of oil prices around the world, together with NYMEX in the USA.
used in diesel engines Let’s briefly talk about how diesel (aka diesel) differs from gasoline. Since both are obtained from crude oil, there is no difference in terms of availability. Diesel is generally used in larger motor vehicles such as trucks, boats, construction equipment, and tractors; On the other hand, gasoline is used in small motor vehicles such as cars and motorcycles.
The main reason for this is; The reason is that diesel is more efficient at constant speeds and gasoline is more efficient at increasing speeds in a short time. However with changing technology The number of cars with diesel engines has increased over time.
In the last 1 year, the relationship between diesel, Brent Oil and the dollar has become quite complicated.
- 1 year ago, Brent Petrol was $73.08 liter of diesel was 7.20 TL and 1 dollar was 8.60 TL.
- Today, Brent Oil rose to $119.68. Average liter of diesel It was 30 TL and 1 dollar increased to 17.32 TL.
- In other words, while the price of Brent Petrol increased by 63.77% in 1 year, the price of diesel increased by 316.5%.
- The dollar we used to buy oil increased by 101.4%.
- If the price of diesel had risen to the same level as the dollar and Brent Petrol, the current price would have been It should have been 23.75 TL. So what could be the reason for this scissors in between?
The prices in the international markets and the production facilities in Turkey are among the factors affecting the diesel’s being more expensive than gasoline.
The increase in diesel prices worldwide, as well as the production facilities in our country, not enough to meet the diesel supply causing prices to rise.
There is an oversupply of gasoline in the global markets. In addition, there are refineries with high gasoline production capacity in the Mediterranean basin, which includes Turkey. diesel production, falls short of demand and as a result, there is a supply gap in diesel in Turkey and its region.
After operations at the oil refinery, the tank is filled from top to bottom in order of propane, kerosene, gasoline, diesel and heavier. What determines this is their specific gravity. The gasoline obtained here is about twice that of diesel. This is why the supply of gasoline is higher than diesel.
With the development of diesel engine technology, people turned to diesel cars.
As a result, in Turkey and throughout Europe diesel fuel consumption increased, gasoline consumption decreased. That’s why refineries in Turkey and Europe started to think about what to do with excess gasoline. In other words, there is an example of a simple Introduction to Economics topic; The price of the scarce good rises faster and more.
In fact, diesel was a more expensive fuel than gasoline in every period, but it is often used in agriculture and logistics, so it is used by governments. with less tax was subsidized.
Cem Uzan’s famous “Diesel will be 1 lira!” its slogan was based on the promise to subsidize it with less taxes.
Now, even with zero tax, “Diesel will be 10 lira!” impossible to say. diesel fuels also in passenger cars Once it was widely used, the state no longer taxed less, because there was a significant reduction in taxes on gasoline. The price of diesel also increased because of this.
The huge price increase in diesel affects the economy badly in our country, where the number of diesel-powered vehicles is over 12 million.
If diesel gets expensive, everything gets expensive. If expenses increase in agriculture, logistics, energy production and transportation, even people who do not have a car will be affected. Prices increase accordingly in markets, markets, travel, water, electricity and many sectors.
RELATED NEWS
The hashtag ‘#KontakkapatTürkiye’ Turned into Action: Roads Closed All Over Turkey [Video]
In order for diesel prices to fall in Turkey, costs must also fall.
The stages of diesel or gasoline until they reach the consumer. cost items should also decrease. For example, when it leaves the refinery, it is transported to reach the consumer. The refinery consumes electricity for separation. The labor cost, the cost of some work to protect the environment, the cost of the various chemicals used to decompose the oil must also decrease. A complete regression in fuel oil cannot be expected without all these falling.
In order for prices to fall, taxes must also fall. The chart below shows us how these taxes have jumped over the past 22 years.
In 1980, the share of indirect taxes in total tax revenues was 37%, today this share It went up to 65%. There are very few countries in the world that impose such taxes on consumption, namely SCT and VAT, which are indirect taxes. The share of indirect taxes in tax revenues averaged 45% in EU countries, but reached 70% in our country.
The tax on diesel and gasoline today approached pump prices almost 7 months ago. For this reason, gasoline, diesel and all kinds of fuel VAT and SCT should be greatly reduced, it even needs to be reset for a while!
Sources: Development Economist H. Bartu Soral, Energy Specialist Mehmet Kara, Global Petrol Prices, Bloomberg