Istanbul (Times Of Ocean)- Turkish state-owned energy importer BOTAS said it had raised natural gas prices for industrial facilities by 50% and those for households by 35% late on Thursday, raising the prospect of further stoking inflation, which is expected to top 60% in March.
BOTAS reported that natural gas prices for electricity production climbed 44.3% since April 1. The rise in energy prices worldwide was cited as the reason for the hikes.
Almost all of Turkey’s energy requirements are imported, leaving it vulnerable to price swings. According to government data, energy costs started rising in September and surged 212% year-over-year in the first two months of 2022 to $16.8 billion.
In recent months, BOTAS’ purchases of foreign currencies from the central bank have reached record highs due to rising energy prices.
Inflation will rise by 55 basis points as a result of the hike in natural gas prices. Increasing industrial natural gas prices has a secondary impact of raising the consumer price index by more than 55 basis points.
Turkey’s consumer inflation, at 54.4% in February, has surged mainly due to the lira’s 44% decline against the dollar. Turkey’s depreciation increased after a series of rate cuts from the central bank, long sought by President Tayyip Erdogan.
Due to rising commodity prices caused by Russia’s invasion of Ukraine, inflation in Turkey is expected to reach 61.5% in March, according to a Reuters poll. It is expected to drop to 52.2% by the end of the year.