Oil companies to cut prices without needing price cap

ANKARA/ISTANBUL

Fuel oil companies will do the necessary price cutting, Energy Minister Taner Yıldız said following the energy watchdog EPDK’s official letter to all companies asking them to slash their prices. If the distributor companies don’t give a discount on prices, the EPDK is expected to set a price ceiling for the sector at its meeting after the Ramadan holiday.

“The EPDK is a public institution in charge of monitoring whether fuel oil prices are in line with European markets, with regard to distributors, refineries and vendors. I believe that the distributor companies will do what is necessary without needing the application of a price ceiling,” Yıldız said Aug. 6, a day before the deadline (Aug. 7) set for the companies by the EPDK.

The EPDK compared Turkey’s gas prices with Mediterranean countries’ prices, which are accepted as “reference prices.” The EPDK told the companies’ executives that as the vendors-distributors had a 0.5-Turkish Lira share on diesel oil and 0.4-lira share on gas they were 0.1-0.15 liras higher than the Mediterranean’s prices, said an executive. Executives reportedly responded that the vendors and distributors had only a share of 0.4 liras (40 kuruş) on gas that cost 4.8 liras ($2.4) per liter.