Turkey likely to raise gas, electricity prices by up to 15 percent next month

Turkey is expected to hike electricity prices and natural gas prices next month, which together could put further pressure on inflation. Four industry sources told Reuters that they expected a 15 percent rise in gas and an 8-15 percent rise in electricity prices beginning Oct. 1.

Thursday September 23 2021 10:30 pm

A worker performs checks at Turkey's Mediterranean port of Ceyhan, which is run by state-owned Petroleum Pipeline Corporation (BOTAŞ).

Reuters

Turkish natural gas and power prices are expected to rise by up to 15 percent next month, four industry sources said, as a global price spike drives up import bills for a country that increasingly relies on gas plants for hydro-generation shortfalls.

More costly gas and electricity could keep upward pressure on Turkey's living costs and inflation, which is near a 2.5-year high above 19 percent. It could also complicate the central bank's plans to ease monetary policy.

The sources, who requested anonymity, said they expected a 15 pecent rise in gas and an 8-15 percent rise in electricity prices beginning Oct. 1.

The government would make any final decision and the Energy Ministry did not immediately comment on whether hikes were imminent.

Natural gas prices have soared by around 280 percent in Europe this year and by more than 100 percent in the United States, pushing up winter fuel bills.

Low storage inventories, high demand for gas in Asia, less Russian and liquefied natural gas (LNG) supply to Europe than usual, high carbon prices and outages have led to the spike.

Analysts expect prices to remain elevated until 2022 or even 2023.

"Due to rising fuel costs, the industry expects a hike in electricity and gas prices. Public authorities are aware of this (necessity)," an energy industry source told Reuters.