Increases in both product prices abroad and in foreign exchange cause increase in LPG prices one after another. Due to the zeroing of the SCT share, the fluctuations in prices can no longer be balanced with the scale mobile system and the hikes are directly reflected in the pump prices. BRC Turkey CEO Kadir Örücü said, “In parallel with the increasing natural gas prices, LPG prices have increased in an unprecedented way. The reflection of the increases in energy prices in the world on our country was different. Autogas prices in our country are around 0,60 Euro/Lt and gasoline prices are around 0,75 Euro/Lt. Since the beginning of the year, LPG prices have increased by 72 percent, while gasoline prices have increased by only 17 percent. For this reason, the gap quickly closed and there was no economic appeal of using LPG. I think that this situation will be solved by ensuring the supply-demand balance in natural gas production,” he said.
Turkey, the world's largest autogas consumer and the country with the highest number of LPG vehicles in the world, with the number of LPG vehicles exceeding 4,5 million, has closed the price gap between LPG and gasoline with the latest price hikes.
Making statements about the increasing LPG prices, BRC Turkey CEO Kadir Örücü said, “In parallel with the increasing natural gas prices, LPG prices have increased in an unprecedented way. Announced at the beginning of every month, Algerian FOB LPG prices have increased by 68 percent since the beginning of the year.
Most of the LPG used in Turkey is imported from Algeria and this LPG is obtained from natural gas. The reflection of the increases in energy prices in the world on our country was a little different. Autogas prices in our country are around 0,60 Euro/Lt and gasoline prices are around 0,75 Euro/Lt. Since the beginning of the year, LPG prices have increased by 72 percent, while gasoline prices have increased by only 17 percent. For this reason, the gap quickly closed and there was no economic appeal of using LPG. Although there are slight differences according to the countries, autogas prices in Europe vary as 0,80 Euro/Lt, and gasoline prices as 1,50 Euro/Lt. According to these prices, LPG and gasoline scissors provide 56 percent fuel economy in European countries, while this rate has reached an unmeasurable level of 4 percent in our country.
“LPG SHOULD BE PROMOTED”
Reminding that Turkey is a party to the Paris Climate Agreement, Kadir Örücü said, “In the concluding agreement of the United Nations Climate Change Conference, the parties to the Paris Agreement were asked to create a roadmap to reduce their carbon emissions. The most environmentally friendly fossil fuel LPG, whose global warming potential (GWP) factor is calculated as 0, receives incentives in conversion and taxation in Italy, Spain, France and England. If we want to achieve our committed carbon emission targets quickly and easily, we must continue to support the LPG sector with its infrastructure that sets an example to the whole world and apply the necessary incentives.”
“WE CONSUME 4 MILLION TONS OF LPG”
Referring to the World LPG Organization (WLPGA) data, Kadir Örücü said, “Turkey surpassed South Korea with its annual autogas consumption of 4 million tons and rose to the first place in the world. Demand for autogas in Turkey has increased by 10% in 46 years. In 2020, sales of zero kilometer LPG vehicles increased threefold compared to the previous year, breaking a record. Our country's leadership in the autogas sector continues with thousands of conversion companies and the number of stations exceeding tens of thousands. The contribution of the sector to employment is growing.
“TURKEY IMPORTS AUTOGAS”
Stating that almost all of the autogas consumed in Turkey is imported, but gasoline is refined from petroleum and produced in our country, Örücü said, “While we produce gasoline in the country, we import autogas. Gasoline production is close to twice the national consumption. For this reason, more than half of the gasoline we produce needs to be exported. For this reason, we see that the pricing mechanism within the country is operated differently.”
“THE STATE HAS NO TAXES TO SACRIFICE”
Adding that fuel prices were balanced until October with the Eşel mobile system, but there was no tax to be sacrificed with the latest hikes, Kadir Örücü said, “The hikes made with the Eşel mobile system were covered by SCT. With the zeroing of the SCT on fuel, the state has no tax left to sacrifice. We can see the price increases that we see in LPG for gasoline as well," he said.
“SUPPLY AND DEMAND WILL BE BALANCED IN LPG”
Stating that there are problems in LPG and natural gas supply due to the political tensions and pandemics in the world recently, Örücü said, “The problems experienced in production have started to be prevented. We expect global prices to decline in December. This will directly reflect on the domestic market. Although we cannot foresee the future of the Turkish Lira, we think that the prices in the LPG market will decrease,” he concluded.