Turkey Weighs Raising Energy Prices as Iran War Rattles Markets

Article content(Bloomberg) — Turkey raised electricity and natural gas prices by as much as 25% for households, as a surge in global energy costs strains the government’s subsidy program.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe increases, announced by the energy regulator on Friday evening, apply across all user groups and include a shift to consumption-based pricing for households, according to a statement. Earlier on Friday, Bloomberg reported that authorities were preparing to raise energy prices as soon as this month.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentElectricity prices for the public and private services sector were lifted by 17.5%, and by 5.8% for industrial users. Natural gas prices were raised by an average of 18.6% for industrial consumers and 19.4% for electricity producers.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentThe Turkish government has for several years subsidized electricity and heating bills for households. Higher utility prices risk complicating the country’s disinflation program, which is a top priority for policymakers after years of soaring costs.Article contentAnnual inflation slowed more than expected to 30.9% in March, but economists expect renewed pressure in the coming months.Article contentThe immediate impact of higher oil prices on Turkish inflation is limited because fuel makes up only about 3% of the basket, wrote Selva Bahar Baziki of Bloomberg Economics. “The bigger threat will come from second-round effects, as firms pass higher energy costs as well as currency weakness into prices,” she added.Article content“If oil prices remain at current levels, the total cost of the increase to Turkey’s budget could be around 620 billion liras ($14 billion) until the end of the year,” Energy Minister Alparslan Bayraktar said late last month.Article contentThe country has also been constraining gasoline prices through tax adjustments, most recently reinstating a sliding-scale mechanism that cuts fuel taxes to “significantly limit” the impact on consumer inflation, Turkish central bank economists wrote in a report. Article content—With assistance from Selcan Hacaoglu and Tugce Ozsoy.Article content(Updates with energy price hikes starting from the lead.)Article contentTrending U.S. targets Canada’s cloud-computing move as trade irritant Economy Why rate watchers shouldn't take the Bank of Canada at its word Mortgages Duty-free stores revenue slashed in half as Canadians boycott U.S. travel News Three Ships Appear to Exit Hormuz by New Oman Coast Route PMN Business Garry Marr: Boomers are dragging their feet to downsize and taxes are a big reason why Personal Finance Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. U.S. targets Canada’s cloud-computing move as trade irritant Economy Why rate watchers shouldn't take the Bank of Canada at its word Mortgages Duty-free stores revenue slashed in half as Canadians boycott U.S. travel News Three Ships Appear to Exit Hormuz by New Oman Coast Route PMN Business Garry Marr: Boomers are dragging their feet to downsize and taxes are a big reason why Personal Finance