The EPDK announced on Thursday that it had approved the Turkish Electricity Trading and Contracting Company's (TETAŞ) proposal of a 21.08 percent increase in the price of electricity. Some 20 electricity distribution firms are expected to convey their demands for price increase to the EPDK, which will then decide on the new electricity tariffs to go into effect on Oct. 1. An increase in the retail price of electricity will also be defined following the EPDK's decision. Asked how retail prices would be affected by the proposed wholesale electricity price increase earlier on Thursday, Energy and Natural Resources Minister Taner Yıldız stated that he expected the increase to be around 10 percent.
The minister said on Friday that some reports presented the proposal as a 21.8 percent increase in retiail prices and that this was incorrect. “TETAŞ's hike proposal is for electricity sold to distribution companies,” he noted.
The Turkish Confederation of Employers' Unions (TİSK) has called on the government Friday not to implement the proposed hike on electricity prices. Releasing a written statement on the latest EPDK decision, TİSK said a price hike in electricity would place yet another big burden on the country's industrialists, who are already under the strain of the ongoing global financial crisis. Recalling that energy prices have increased remarkably in Turkey in past year, TİSK said the increase was 50 percent in natural gas, while electricity prices rose by one-third more in the past 12 months than in the same period last year. The union also emphasized that a recent report compiled by the Organization for Economic Cooperation and Development (OECD) has shown that Turkish industry was under a heavy burden of high energy costs. Commenting on the proposed price hike, Bursa Trade and Industry Union (BTSO) President Celal Sönmez said an increase in electricity prices would weaken Turkish industrialists' hand and decrease their competitive power in global markets. The BTSO head also stated that the price hike would lead to a change in inflation expectations for the worse. “In a market atmosphere where annual inflation is roughly around 6 percent, a 10 percent hike in retail electricity prices will definitely negatively affect inflation in the coming months,” Sönmez explained. Turkish Tradesmen's and Artisans' Confederation (TESK) Chairman Bendevi Palandöken has said the government should send the electricity hike proposal back, noting that the hike could deal a major blow to consumers' budgets and that the government should have rejected the hike proposal. “If they do so, many businesses, already suffering heavy losses due to the crisis, will come face to face with bankruptcy,” Palandöken said.
Meanwhile, the central bank announced on Friday that the expected price hike in electricity would affect October inflation figures negatively.
