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buying spot gas via pipelines.
On January 28, Bloomberg cited some unnamed sources as saying that Turkey was seeking LNG imports. There is no explanation why the government is doing this one week after the country falls into an energy crisis rather than solving the situation a few months ago. Turkey has not imported LNG from the Erdogan regime’s close ally in 2021 (See Section 8.1.1).
Cutting industrial production was quickly adopted as the favoured option.
As a result of the move to curtail electricity use, the central bank can now expect to reduce the subsidy it is directing to Botas for the payment of gas import bills, while intermediary goods importers will need less FX.
The problem with Botas is that its revenues are in Turkish lira, but it buys gas with USD. Even if it hikes prices to zero its subsidies, it cannot buy gas with its lira.
“The industrialist is puzzled, daunted, dispirited. There’s no one who knows or who tells where and when the solution is. It is unclear whether this problem is really temporary or permanent,” Mujdat Kececi, head of the chamber of industry in Denizli province told local press.
“All of us are in shock,” Mustafa Gultepe, head of the readywear exporters association in Istanbul (IHKIB), said.
"Cold storage units need electricity. Energy limitations pose a serious risk to food safety," the Organic Producers and Manufacturers Union said.
It is particularly those industries that use high-temperature furnaces, such as steelmakers and glassmakers who will face serious costs amid the energy deficit. They are not able to simply switch off and switch on their furnaces.
The electricity restrictions are also shocking news for foreign partners, both in terms of customers abroad and foreign investors in Turkey.
The crisis may repeat itself depending on weather conditions by March 15, Mehmet Dogan, general manager of GazDay Enerji, told Dunya.
On January 19, Turkey’s daily gas consumption was record-breaking at 288mn m3. It retreated to 240mn m3 during the January 21 to January 23 weekend and it has hovered in the 240-250mn since then.
The contribution of natural gas plants to Turkey’s electricity production had only marginally declined.
Meanwhile, much of Turkey remained snowbound. Flights in Istanbul were cancelled.
On January 28, Turkey’s energy ministry said that the electricity cuts were to end on January 29 and the gas cuts would decline to 20% starting from January 31.
On February 7, Botas said gas flow would be fully restored as of February 8.
23 TURKEY Country Report February 2022 www.intellinews.com