Page 8 - MEOG Week 39 2021
P. 8
MEOG PRICES & PERFORMANCE MEOG
Turkish gas and power prices
to rise amid global spike
TURKEY TURKEY’S natural gas and power prices are storage inventories, high demand for gas in Asia,
reportedly expected to rise by up to 15% next less Russian and liquefied natural gas (LNG)
month, with spiking global prices pushing supply to Europe than usual, high carbon prices
up energy import bills for a country that has and outages have led to the spike.
scarce hydrocarbon resources of its own and is Turkey is very highly dependent on imported
increasingly dependent on gas plants to cover gas that flows via pipelines from Russia, Iran and
for hydro-generation shortfalls occurring amid Azerbaijan.
prolonged drought conditions. Local gas consumption is expected to hit
Reuters on September 23 referred to four 60bn cubic metres (bcm) this year, almost a fifth
industry sources as anticipating the price hike. higher than earlier estimates given how moth-
If costlier energy prices add to Turkey’s infla- balled gas plants have been restarted to make up
tion problem – officially annual inflation stands for shortfalls in hydro power production, Reu-
at 19.25% although independent research con- ters wrote.
ducted by Istanbul academics suggests that in “Hydro’s share [in energy supply] is at 10%
reality it is at least twice that – they will prove so far this month, the lowest in a decade,” one
another obstacle to a central bank that, despite of the sources at a private electricity producer
market sentiment that if anything it should be was cited as saying, adding: “Weather forecasts
raising rates, is embarking on an easing cycle. On we have suggest a grim winter for hydro, thus
September 23, the regulator cut its policy rate by electricity bills.”
100bp to 18%. Electricity and natural gas make up 4.4% of
The sources, who requested anonymity, told Turkey’s consumer price index, meaning a 15%
the news agency that they expected a 15% rise in price hike across the board would increase con-
gas and an 8-15% rise in electricity prices begin- sumer prices by 0.7 percentage points.
ning October 1. Asian LNG prices climbed by around 10%
The government would make any final this week, with demand continuing to intensify
decision. in Asia despite higher prices and amid a supply
Natural gas prices have soared by around crunch. Turkish state energy company Botas
280% in Europe this year and by more than was said to be seeking 20 cargoes for delivery in
100% in the US, pushing up winter fuel bills. Low winter.
P8 www. NEWSBASE .com Week 39 29•September•2021
