Türkiye to face inevitable hike in household energy prices, says expert

Energy price hikes on household electricity and natural gas bills appear inevitable as skyrocketing costs increase Türkiye’s economic burden from subsidies, cautioned Hakan Kara, former chief economist of the Central Bank of the Republic of Türkiye (CBRT) and a professor of economics.

In a post on his X account, Kara warned about the unsustainability of energy subsidies in 2025 and underscored the inevitability of price increases in electricity and natural gas.

Kara highlighted that the Turkish government subsidized ₺280 billion ($7.88 billion) in energy sector losses in 2023. He projected this figure could soar to ₺400 billion in 2025 if adjustments are not made and natural gas prices continue their upward trend.

Compared to Türkiye’s consumer price index, Kara emphasized the large gap between the increase in inflation and energy bills, remarking “Electricity prices seem to have been heavily suppressed in recent years.”

Subsidies cover 60% of household energy prices

Türkiye’s government has continued subsidizing energy bills to mitigate the inflationary impact of rising global energy prices and exchange rate fluctuations.

According to Energy and Natural Resources Minister Alparslan Bayraktar, subsidies currently cover 60% of household electricity and natural gas bills, meaning that for a ₺1,000 bill, the state shoulders ₺600.

However, as of 2024, the government revised its subsidy policy, discontinuing support for high-consumption households. Under the new framework, electricity bills exceeding 417 kilowatt-hours—approximately ₺1,050—are no longer subsidized.

‘No price hikes in the first quarter,’ says minister

Minister Bayraktar, in his statements on Jan. 10, ruled out energy price hikes for the first quarter of 2024. However, he left open the possibility of a single adjustment later in the year, citing inflationary pressures and global cost trends.

“Following the pandemic, we ensured citizens were not burdened by rising commodity prices. Currently, the state covers 60% of low-tier electricity bills and 40% of high-tier bills. For natural gas, the subsidy is as high as 65%. With inflation and global costs in mind, there could be a one-time adjustment later this year. But for now, we plan to maintain the status quo in the first quarter,” Bayraktar stated.