Energy prices up in Turkey

Turkish consumers would give anything to hear that Sunday's hike in natural gas and electricity retail prices was only an April Fool's Day joke; however, governments in Turkey play tough when it comes to energy pricing.

As anticipated, it did not take long for a new wave of energy price hikes to follow Thursday's 2 percent increase in the price of gasoline, when 18.72 and 9.26 percent increases in natural gas and in electricity prices, respectively, were announced on Saturday. The new hikes are valid starting Sunday, April 1.

The decision for a price hike in natural gas that stunned Turkish consumers came from Energy Minister Taner Y?ld?z late on Saturday on a TV program. Elaborating on this announcement, a written statement from the state-owned Turkish Pipeline Corporation (BOTA?) on Saturday said the price of natural gas for end-users (households) will increase by 18.72 percent. This means a consumer who used to pay TL 250 for natural gas per month will have to pay TL 296.8 following the latest price increase. The minimum wage paid to nearly 5 million workers in Turkey currently stands at TL 701 ($392.5).

Natural gas prices in Turkey are determined in accordance with changes in oil prices and foreign exchange rates. The BOTA? statement cited a “necessity to revise natural gas prices amid global oil price hikes and the Turkish lira's losing value against foreign currencies.” Turkey imports almost all of its oil in US dollars, meaning natural gas prices are therefore also dependent on crude prices and the value of the American currency. The greenback has strengthened against the Turkish lira from below TL 1.75 on Feb. 19 to its present level of more than TL 1.78. The price of a barrel of crude oil, likewise, jumped to $105 from below $100 in a month.

 “We are not introducing these hikes, but we had to make this decision after long deliberations on developments in global energy markets.” The minister said the amount of money Turkey paid for a barrel of crude skyrocketed to $122 from $22 in the past 10 years. He said the devaluation of the Turkish lira against the US dollar meant an additional 17 percent rise in the country's oil import tariff. Turkey produced a total of 228.4 billion kilowatt hours of electricity last year, with 45 percent of this generated by natural gas conversion plants.


/WorldBulletin/