Reaction from IETT General Manager Alper Bilgili to Fuel Increases

Reaction to Fuel Increases from IETT General Manager Alper Bilgili
Reaction to Fuel Increases from IETT General Manager Alper Bilgili

İBB subsidiary İETT shared the cost of fuel hikes, dollar rate increase and inflation to the institution with data. IETT General Manager Alper Bilgili said that they are faced with an additional cost of approximately 2,5 billion TL due to the budget approved by the IMM Assembly only due to fuel, and stated that the cost coverage ratio of ticket revenues has decreased by 30 percent. Noting that fuel prices rose 155 percent and the dollar rate increased 65 percent compared to the previous year, Bilgili said; He said that those who do taxi, minibus service and sea transportation have come to the point of stopping their services. Reiterating the joint demand of 11 metropolitan mayors, Bilgili said, “There is a significant amount of SCT and VAT expenses in our diesel expense. This corresponds to an annual cost of approximately one billion liras. We have a request from our state to exempt the fuel used in public transportation from VAT and SCT.”

IETT, a subsidiary of the Istanbul Metropolitan Municipality (IMM), shared the economic burden that the cost increases in recent months have brought to the institution and to all institutions engaged in transportation, at its press conference. Welcoming the members of the press at IETT's Social Facilities in Kağıthane, General Manager Alper Bilgili showed the picture reached by fuel price hikes, dollar rate increase and inflation. Stating that they are in a period of extraordinary increases, Bilgili explained his balance sheet that has changed over the years.

“FUEL RISE 155 PERCENT”

Summarizing the 5-year course of fuel prices, Bilgili said that fuel prices increased by 155 percent compared to the average of the previous year. Underlining that the fuel expenses reached 50 percent in the total balance sheet of the institution, Bilgili also explained the costs affected by the foreign exchange increase. “Two-thirds of our costs are directly affected by the exchange rate,” said Bilgili, and shared the information that 65 percent of the expenses depend on the exchange rate.

“THE COST WILL INCREASED EVEN MORE”

Noting that fuel hikes and high exchange rates are also reflected in inflation, Bilgili said, “We had to reflect this on our personnel costs. Accordingly, in an environment where the minimum wage increased by 50 percent, our personnel costs increased by 40 percent. We can imagine that this will happen even more in the coming months,” he said.

FUEL RISE BY 130 PERCENT AFTER THE LAST BUDGET

Reminding that the IETT budget was approved in the IMM Assembly in November 2021, Bilgili explained that the cost increase made the applicability of the budget difficult. Bilgili continued her explanation as follows:

“The diesel oil, which was 8,2 liras during the preparation of the budget, has increased by 130 percent today. The dollar rate, which was about 10 lira, rose 50 percent today. While the minimum wage was 2.826 liras, it has increased by 50 percent today. Similarly, inflation has reached 54 percent today from 6 percent. This year, we experienced the biggest increase among our cost increases in fuel oil. IETT serves Istanbul with a total of 6 thousand buses. These 600 thousand vehicles consume 8,2 thousand liters of diesel per day. We can buy a liter of diesel, which was 18,7 lira in November, for XNUMX lira today.”

WE REQUEST TAX REDUCTION

Stating that the high increase in fuel has brought an additional burden of 2,5 billion liras to IETT, Bilgili said that the point reached is above the levels that a municipality can afford. Stating that the SCT and VAT in fuel expenses reached 1 billion liras, Bilgili repeated the tax reduction proposal of 11 Metropolitan Mayors. “As stated by our mayors, we have a request from our state to exempt fuel used in public transportation from VAT and SCT,” he said.

Answering the questions of journalists, Bilgili gave the following answer to the question that the age limit will be placed on student tickets:

“We have a large number of passengers over the age of twenty-five using the student subscription. However, this is not a subject that IETT can evaluate alone. It is an issue that needs to be decided by the relevant units of the Istanbul Metropolitan Municipality. We came together with tradesmen and trade associations twice this month. In the meetings, all minibus taxi drivers, service and sea travel carriers reported that they could no longer continue their services due to the cost increases I mentioned earlier, and some of them would have to close their contacts soon. Therefore, in line with the demands from all these groups, our municipality will probably present a proposal on this issue to the next UKOME meeting.”

Bilgili gave the following answer to another journalist's question, "Will there be a price increase in transportation?"

“At the meeting held with professional organizations, all occupational groups demanded a price increase ranging from 50 percent to 100 percent. I think that the municipality cannot remain indifferent to these demands. There will be a proposal on this topic at the first UKOME. I don't think the figure will be below 50 percent."

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