Turkey hikes gas and power prices
Sep 3, 2018-
Turkey raised natural gas prices on Saturday by as much as 14 percent, two sources said, while the energy regulator announced a similar increase in electricity costs as a deepening currency crisis stokes inflation.
The lira has fallen 42 percent against the dollar this year, hit by concerns about President Tayyip Erdogan’s grip on monetary policy and a worsening rift with the United States over a detained American Christian pastor.
The sell-off has increased the cost of food and petrol and raised fears about the impact on the country’s wider economy and banks. Economists are particularly worried about the central bank’s inability to rein in inflation, which hit a 14-year high of nearly 16 percent in July.
State pipeline operator Botas raised natural gas prices by 14 percent for industrial use and 9 percent for residential use effective from Saturday, two sources told Reuters. Officials for Botas were not immediately available to comment.
Last month, Botas increased the price of natural gas for electricity production by 50 percent and by 9 percent for residential use. Turkey is dependent on imports for almost all of its energy needs. The lira crisis has driven up the cost, in local currency terms, of oil and gas.
Likewise, Turkey’s energy regulator said it would raise electricity prices by 14 percent for industrial use and 9 percent for households from Saturday. It increased prices by the same amount last month. Almost a third of Turkey’s total 293 billion megawatt power production came from natural gas power plants in 2017. Retail prices in Istanbul, Turkey’s biggest city, surged 2.23 percent month-on-month in August, for a year-on-year increase of 14.99 percent, the Istanbul Chamber of Commerce said on Saturday.
Official August inflation data is due on Monday, and economists expect another hefty reading. “This will provide the first hard evidence of the impact of the lira’s collapse this month on the wider economy,” Jason Tuvey of Capital Economics said in a note to clients on Friday.
Published: 03-09-2018 08:40