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Motor fuel prices in Turkey

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  • Erdogdu, Erkan

Abstract

The world׳s most expensive motor fuel (gasoline, diesel and LPG) is sold most likely in the Republic of Turkey. This paper investigates the key issues related to the motor fuel prices in Turkey. First of all, the paper analyses the main reason behind high prices, namely motor fuel taxes in Turkey. Then, it estimates the elasticity of motor fuel demand in Turkey using an econometric analysis. The findings indicate that motor fuel demand in Turkey is quite inelastic and, therefore, not responsive to price increases caused by an increase in either pre-tax prices or taxes. Therefore, fuel market in Turkey is open to opportunistic behavior by firms (through excessive profits) and the government (through excessive taxes). Besides, the paper focuses on the impact of high motor fuel prices on road transport associated activities, including the pattern of passenger transportation, motorization rate, fuel use, total kilometers traveled and CO2 emissions from road transportation. The impact of motor fuel prices on income distribution in Turkey and Turkish public opinion about high motor fuel prices are also among the subjects investigated in the course of the study.

Suggested Citation

  • Erdogdu, Erkan, 2014. "Motor fuel prices in Turkey," Energy Policy, Elsevier, vol. 69(C), pages 143-153.
  • Handle: RePEc:eee:enepol:v:69:y:2014:i:c:p:143-153
    DOI: 10.1016/j.enpol.2013.10.075
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    References listed on IDEAS

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    1. World Bank, 2013. "World Development Indicators 2013," World Bank Publications, The World Bank, number 13191.
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    Cited by:

    1. repec:eee:joecas:v:15:y:2017:i:c:p:64-75 is not listed on IDEAS
    2. repec:eee:eneeco:v:68:y:2017:i:s1:p:66-80 is not listed on IDEAS
    3. Hasanov, Mübariz, 2015. "The demand for transport fuels in Turkey," Energy Economics, Elsevier, vol. 51(C), pages 125-134.
    4. Yalta, A. Talha & Yalta, A. Yasemin, 2016. "The dynamics of fuel demand and illegal fuel activity in Turkey," Energy Economics, Elsevier, vol. 54(C), pages 144-158.
    5. Gevrek, Z.Eylem & Uyduranoglu, Ayse, 2015. "Public preferences for carbon tax attributes," Ecological Economics, Elsevier, vol. 118(C), pages 186-197.

    More about this item

    Keywords

    Model construction and estimation; Fiscal policy; Motor fuel prices;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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