34. International Public Finance Conference

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DOI :10.26650/PB/SS10.2019.001.023   IUP :10.26650/PB/SS10.2019.001.023    Full Text (PDF)

An Analysis on the Relationship Between Fuel Taxes and Fuel Consumption and Current Deficit: a Case of Turkey

Murat Güngül, Hakan Acaroğlu

Obtaining energy appears to be a high-cost need almost all over the world. For specific countries, energy is a source of income rather than being a cost, for the reason of they have geographic or technological advantages. Energy is an income factor not during the production stages, but in the consumption stages through taxes for the other countries like Turkey. Among all energy sources, this situation is most clearly seen in fuel.

Both in Turkey and many countries in the world, high-rate taxes on fuel are received. So much so that these taxes are received on fuel in many places even exceeds the cost of obtaining fuel. And this affects flow of the economy from many aspects. For this reason, how the taxes on fuel affect fuel consumption and the current deficit, and the causality relationship between those, are examined in this study with the case of Turkey.

At the result of this study, it has been determined that there is a two-way relationship between the current deficit and fuel taxes, and a one-way relationship between fuel consumption and current deficit. Therefore, a change in current deficit is a reason for a change in fuel taxes; likewise, a change in fuel taxes is a reason for a change in current deficit. In addition to this, a change in fuel consumption is a reason for the change in current deficit. Any relation was not determined for the other cases.

The results were obtained by the help of Granger Causality Tests. The data set was taken from Central Bank of the Republic of Turkey, Turkish Statistical Institute, Energy Market Regulatory Authority, Revenue Administration and Petroleum Industry Association databases covering the years of 1996-2017.  


Keywords: Fuel Taxes, Current Deficit, Fuel Consumption, Granger Causality Test.
JEL Classification : H20 , H71 , Q43

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