Turkey raises electricity, gas prices by 50% for industry, 20% for homes

Turkish authorities has raised electricity and natural gas prices for households by around 20% and by around 50% for industry on Thursday, putting further upward pressure on inflation, which was running at nearly 80% 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%, those used by public and services sectors by 30% and those used in industry by 50%.

State energy importer BOTAS said it hiked the natural gas price for domestic use by 20.4%, by 47.6% for small- to medium-scale industrial customers, and by 50.8% for large industrial users.

The price of gas used for electricity production was raised by 49.5%, 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% in 2021 and more than 27% this year – have stoked prices domestically.

Household natural gas prices have been hiked 174% this year, small- to medium-scale industrial gas prices were raised 277% and large industrial prices by 379%.

The state still subsidises over 80% of natural gas prices for households, BOTAS said on Thursday.