Turkey raised household electricity and natural gas prices by up to 25%, intensifying the pressure on government subsidies amid soaring global energy costs, officials announced Friday.
The increases, approved by the Energy Market Regulatory Authority, include a consumption-based pricing model for households, while electricity prices for public and private service sectors rose 17.5% and 5.8% for industrial users. Natural gas prices climbed 18.6% for industrial consumers and 19.4% for power producers.
Turkey has long subsidized electricity and heating costs for households. However, analysts warn that the new hikes could complicate the government’s efforts to curb inflation, a top policy priority after years of surging energy and commodity prices.
Despite a slowdown in annual inflation to 30.9% in March, lower than expected, economists expect renewed upward pressure in the coming months. According to Energy Minister Alpaslan Bayraktar, if oil prices remain at current levels, the total cost of the increase could reach 620 billion lira (approximately $14 billion) by the end of 2026.
“While the direct impact of oil price rises on consumer inflation is limited, fuel accounts for just 3% of the consumer price basket, the indirect effects are significant,” said a central bank analyst, noting that companies often pass higher energy costs onto consumers, while the weakening lira exacerbates price pressures.
Authorities are also exploring reforms to natural gas subsidies, potentially linking support more closely to consumption levels and regional climatic conditions. Meanwhile, progressive fuel tax mechanisms have been reintroduced to moderate the impact of higher gasoline prices on overall consumer inflation.
The measures come as Turkey navigates a turbulent global energy landscape, affected by the ongoing Middle East conflict that has disrupted supply chains and pushed up oil and gas prices worldwide.
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