Turkish authorities raised electricity and natural gas prices for households by around 20 per cent and by around 50 per cent for industry on Thursday, putting further upward pressure on inflation, which was running at nearly 80 per cent in July.
The utility price hikes are expected to push inflation up by 0.8 percentage points, according to a Reuters calculation, while higher industrial prices also lead to an indirect increase in inflation as producers reflect the costs on to consumers.
Turkey’s EPDK energy regulator said it had raised household electricity prices by 20 per cent, those used by public and services sectors by 30 per cent and those used in industry by 50 per cent.
State energy importer BOTAS said it hiked the natural gas price for domestic use by 20.4 per cent, by 47.6 per cent for small- to medium-scale industrial customers, and by 50.8 per cent for large industrial users.
The price of gas used for electricity production was raised by 49.5 per cent, BOTAS said.
Both bodies cited the conflict in Ukraine and global developments, including the COVID-19 pandemic, as reasons for the hikes.
Turkey is almost completely reliant on imports to meet its natural gas and oil needs and domestic demand has risen since the COVID-19 pandemic. The rise in global energy prices this year, as well as the lira’s sharp decline – 44 per cent in 2021 and more than 27 per cent this year – have stoked prices domestically.
Household natural gas prices have been hiked 174 per cent this year, small- to medium-scale industrial gas prices were raised 277 per cent and large industrial prices by 379 per cent.
The state still subsidises over 80 per cent of natural gas prices for households, BOTAS said on Thursday.