Turkish state energy importer BOTAS announced late Thursday that it had increased gas prices for industrial plants by 50% and those for households by 35%, raising the prospect of further inflation supply expected to be announced close to 60% for March.
BOTAS also reported that gas prices for electricity generation had risen by 44.3% since April 1, citing global energy prices as the reason for the increases.
Turkey imports almost all of its energy needs, which makes it vulnerable to large price fluctuations. Its energy costs began to rise in September, rising 212% year-on-year in the first two months of 2022 to $ 16.8 billion, according to government figures.
BOTAS foreign exchange markets by the central bank have reached record highs in recent months due to the spike in energy prices.
Economists estimate that rising household gas prices will increase inflation by 55 basis points. The side effect of rising industrial gas prices is to increase the consumer price index by more than 55 basis points.
Turkey’s consumer inflation, at 54.4% in February, has skyrocketed mainly due to the 44% drop in the pound against the dollar last year. The devaluation was amplified by a series of interest rate cuts by the central bank, long sought by President Tayyip Erdogan.
Recently boosted by rising commodity prices due to Russia’s invasion of Ukraine, inflation in Turkey is expected to reach 61.5% in March, according to a Reuters poll. It seems to fall to 52.2% by the end of the year.
Source: Capital
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