Minimum 10 pct gas price cut expected as of 2009 in Turkey

Turkey increased gas prices by 22.5 percent for residents and by 22 percent for industry in October, the fifth increase in natural gas since the beginning of the year, raising prices for domestic users by 72.7 percent and industry prices by 74.9 percent for the same period.Â

 

This latest rate hike had heightened criticism of the government for being announced at a time when oil prices have declined more than 50 percent from record high levels recorded at the beginning of July.

 

The Turkish currency lira lost as much as a third of its value since the beginning of the global asset sell-off in October, but has pulled back to 1.52 levels from lows of 1.74 to the dollar.

 

The Turkish Electricity Distribution Company (TEDAS) also applied to Turkey's energy watchdog (EPDK) not recommending any rise in the prices inline with the tariff period review that is set by the quarterly automatic pricing mechanism, which is due to go into effect as of Jan 1, 2009.

 

Falling demand stemming from a downturn in the economy is seen as the most important reason for the not increasing prices at this time.

 

Electricity usage grew 15 percent in the first half of 2008, but showed a decline from October with electricity demand falling by 5 percent in November, and a further 8 percent as of Dec. 22.