ANKARA (Albawaba) - Subsidized sales of liquefied petroleum gas (LPG) to Turkish consumers will cost $415 million in tax losses this year, a top government official said.
"The government is planning to raise taxes on LPG without cutting support for low-income earners using gas tanks in their kitchens," Energy Ministry Undersecretary Yurdakul Yigitguden told The Economist's energy conference this week. It is sponsored by BG International, BP, EMG, Gama, International Power and Shell.
Yigitguden said the price of LPG per liter should rise to at least 7.5 cents from the current 6.5 cents, bearing in mind an OECD average of 8.4 cents. He signaled that the government might look to raise fuel prices by raising taxes on oil to regain tax revenue that has been lost so far.
"If everyone shows some understanding we could get through this period with no problems," Yigitguden said. "The government is carefully watching the oil markets and taking timely measures. It plans to take more," he added.
The government has been slashing taxes in order to avert inflationary pressures created by runaway global oil prices. The undersecretary said besides the 29 power plant projects that were sent to the government's High Planning Board, the Energy Ministry was about to present a number of projects to the State Planning Organization to meet energy demand in 2001-2002.
Yigitguden said the government was planning on passing two bills aimed at deregulating the electricity and petrol sectors by the end of the year.
"Build-operate-transfer power projects could resume in 2003 when the new market model becomes operational following a transition period," he said. He said the oil bill would not include a guarantee on exchange rates, which he said was not supportive of the sector. –(Albawaba-MEBG)
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