Turkey to hike natural gas price by 4.55 pct as of Wed

The price of natural gas for industry would increase by 4.69 percent as of Wednesday.

 

Analysts have said the increase in gas prices, in line with a new cost-based pricing mechanism, would push up annual consumer price inflation, which was 10.6 percent in June, by 0.2-0.5 percentage points.

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High oil prices were having a direct impact on gas sector costs and contracts would require a reassessment of gas prices in October.

 

"There is a delayed impact on prices. Hence a second wave of high natural gas price hikes may be necessary," a ministry source was quoted as saying by Reuters.

 

The cost-based pricing mechanism, introduced by the High Planning Board at the start of July, applies to all state energy companies. It is seen as a key step before fresh privatizations of power distribution and production facilities.

 

The August gas price hike was 16.88 percent for residential properties and 18.77 percent for industry. Added to price rises in June, the total increase this year was 25.5 percent for residential properties and 28.6 percent for industry.

 

Before the new system was introduced, electricity prices for industry were raised by 22 percent effective from July. Electricity companies did not apply to set new power tariffs in September.

 

Rises in energy prices generally have been a major component in Turkey's double-digit inflation.