No SCT Increase in Fuel and Tobacco for 6 Months

An important economic decision directly affecting millions of citizens and market dynamics entered into force after being published in the Official Gazette. Within the scope of the final regulation, it has been finalized that there will be no increase in Special Consumption Tax (SCT) amounts for fuel products as well as cigarettes and other tobacco products for the July-December period, the second half of the year. This decree, which became official with the signature of President Recep Tayyip Erdoğan, found wide resonance in the economic agenda, while putting an end to a curiosity awaited by citizens, especially regarding living costs.

The decree was placed on a legal ground with the Presidential Decision numbered 11489 in the duplicate issue of the Official Gazette. This provision envisages the suspension of the annual automatic increase mechanism for goods under the Law No. 4760 on Special Consumption Tax for a certain period. The legal regulation in question completely disables the process of re-determining tax rates and fixed amounts applied to some products listed in Table (B) of List (III) annexed to the law, to be valid for the July-December period of 2026.

The biggest impact of the decision in question will be felt on fuel, one of the most consumed consumer goods in daily life. The fact that no SCT increase will be made on fuel products such as benzine and diesel is considered a critical step taken to prevent potential hikes reflecting on pump prices. This situation aims to help control the rate of increase in fuel expenses for both individual vehicle owners and businesses engaged in commercial transportation, and to reduce inflationary pressures.

The second major area of impact from the SCT regulation constitutes the tobacco products sector. The non-application of the automatic hike on cigarettes and other tobacco products will ensure that price increases in this sector are curbed for a while longer. While consumers breathe a sigh of relief due to the expected price increase on cigarettes not being implemented, industry representatives also expect this tax stability to reflect positively on market balances. However, the uncertainty regarding how long this relief will remain in place remains a factor that complicates forecasts for the coming period.

Viewed collectively, this decision can be characterized as part of the government's policies aimed at protecting the welfare level of citizens during the fight against inflation. Although this measure, taken due to election economics or inflation pressures, curbs price increases in the short term, its long-term effects continue to be a matter of curiosity regarding the sustainability of fiscal policies. If the economic management follows similar paths in the remainder of the year, market actors will closely monitor what its contribution to price stability will be.