Turkish authorities raised electricity and natural gas prices for households by about 20 percent and by about 50 percent for industry on Thursday. This will put additional pressure on inflation, which reached nearly 80% in July, Reuters reports.
The rise in utility prices is expected to push inflation up another 0.8 percentage points, according to a Reuters estimate. Higher industrial prices also lead to an indirect increase in inflation as producers pass the cost on to consumers.
Turkey’s energy regulator EPDK said it has raised electricity prices for households by 20%. Electricity used by the public sector and the service sector jumps by 30%, and that used by industry by 50%.
State energy importer BOTAS said it has raised the price of natural gas for domestic use by 20.4%, as well as 47.6% for small to medium industrial customers. Large industrial consumers will pay 50.8% more expensive gas.
The price of gas used to generate electricity has increased by 49.5%. The state still subsidizes more than 80 percent of natural gas prices for households, BOTAS said Thursday.
Both bodies – EPDK and BOTAS – cited the conflict in Ukraine and global developments, including the COVID-19 pandemic, as reasons for the increases.
Turkey is almost entirely dependent on imports to meet its natural gas and oil needs, and domestic demand has surged since the COVID-19 pandemic. A rise in global energy prices this year, as well as a sharp fall in the pound – 44% in 2021 and more than 27% this year – have pushed up domestic prices.
Natural gas prices for households have increased by 174% this year, industrial gas prices for small and medium-sized businesses have increased by 277%, and prices for large industrial users have increased by 379%.