Struggling Turks see more price hikes in electricity, natural gas

Turkey’s electricity prices have increased 122 percent in the last 3.5 years according to official data while big enterprises benefited from price reductions.

Wednesday July 07 2021 11:49 am

K. Murat Yıldız / Duvar English

Turkey’s electricity prices have increased 122 percent in the last 3.5 years according to official data while big enterprises benefited from price reductions. More than 150,000 subscribers had their natural gas and electricity subscriptions canceled last year due to unpaid bills.

The electricity tariffs were changed because of rising electricity production costs, according to a statement from the Energy Market Regulatory Authority (EPDK). As a result, the final electricity sales price for all subscriber groups was increased by 15 percent, effective July 1.

Radical price hikes also occurred for natural gas. The natural gas tariff table for July was published on the website of state-owned Petroleum Pipeline Corporation (BOTAŞ) announcing that residential subscribers' natural gas tariffs were raised by 12 percent, industrial groups' tariffs by 20 percent, and electricity generation plants' tariffs were raised by 20.2 percent.

The EPDK in its public statement announced that “because of rising electricity generation costs, all subscriber groups will see a 15 percent increase in final electricity sales prices beginning July 1, 2021.” As a result, residential subscribers will pay 91.56 liras for 100 kilowatt-hours of electricity starting July 1, including taxes and funds.

122 percent price increase in 3.5 years

With this latest increase, electricity prices have increased 122 percent in the last 3.5 years according to official data.

“The increase in electricity prices, which is 15 percent in 2021, has been 70 percent in the last two and a half years,” Union of Chambers of Turkish Engineers and Architects’ (TMMOB) Energy Working Group President Oğuz Türkyılmaz told Duvar English.

According to a report published by TMMOB, gas purchase prices for homes and small businesses increased by 17.7 percent to 28.8 percent in 2021, increases have ranged from 32 to 67.2 percent since the beginning of 2019.

The Turkish Statistical Institute (TÜİK) announced an inflation rate of 35 percent during this period, while price increases for electricity and natural gas were twice that, the report pointed out.

Natural gas price tariffs are calculated monthly. Therefore, as of June, the price of 1000 cubic meters of natural gas increased by 12 percent to 1,488 liras, while the price for industrial subscribers increased by 20 percent to 1,783 liras and 54 cents.

Criticism from opposition

These price hikes encouraged heavy criticism from the opposition including former allies of President Erdoğan including former Prime Minister Ahmet Davutoğlu and Deputy Prime Minister Ali Babacan.

“As if the natural gas hikes every month were not enough, they increased electricity prices by 15 percent again. It's as if the government has taken an oath to take the wealth of its citizens,” Davutoğlu said.

Babacan pointed to the extensive and lavish expenditures of the President and called to put end to this. “He again cut the bill on the citizens,” the former Deputy Prime Minister added.

More than 150,000 subscriptions canceled due to unpaid bills

According to information provided by Turkey's Minister of Energy and Natural Resources, Fatih Dönmez, in the Grand National Assembly, 107,000 residential electricity subscriptions were canceled in the first nine months of 2020 due to outstanding debts of 101 million liras; and 51,000 natural gas subscriptions were canceled due to outstanding debts of 399 million liras.

The opposition claims that the number of canceled subscriptions is much higher than announced by the minister.

Experts like TMOBB’s Türkyılmaz told Duvar English that these price hikes in natural gas and electricity will not be the last ones.

“The amount of natural gas used to generate electricity is increasing continuously. Hydroelectric production is decreasing due to drought. The price of liquefied natural gas (LNG) and natural gas is rising. About 45 percent of electricity production is reliant on imported gas. The lira is losing value. All of this indicates that there will be more hikes,” he added.

Türkyılmaz also repeated TMOBB’s earlier call on the government to support people who are not able to pay their gas and electricity bills.

“We saw that, according to official data, over 150,000 subscribers had to sit in the dark and cold last winter or cease their activities. The government has to take steps to prevent this from happening again,” he concluded.