Energy prices threaten to aggravate Turkey’s economic woes
Natural gas prices have shot up in Turkey, where heavy reliance on foreign energy sources leave the economy vulnerable.
Turks woke up to a huge hike in natural gas prices Nov. 1, the latest in a series of energy price increases that threaten to further stoke inflation and popular frustration with Ankara’s economic management.
The price of natural gas used by power plants was raised by 46.8% and the price of gas used by industrial enterprises by 48.4%. Consumer prices remained unchanged, but consumers can hardly escape the inflationary impact the hikes will have across an economy that is already grappling with a nearly 20% inflation and a nosediving currency.
The gas price hikes follow a series of price increases on fuel. The price of gasoline was raised four times in October alone, leading to protests by taxi drivers and long queues at filling stations before the hikes took effect at midnight.
Turkey’s heavy reliance on foreign energy sources — it imports more than 93% of its oil needs and 98% of its gas — lies at the core of the problem. Unlike other countries, however, Turkey’s price hikes have been driven not only by the uptick in global energy prices but also the dramatic depreciation of the Turkish lira. The currency lost nearly 7% of its value against the dollar in October alone, according to Central Bank data.
