Turkey raises energy prices; The highest monthly inflation in Istanbul in the last decade Reuters

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© Reuters. FILE PHOTO: Vehicles in line at gas station in Ankara, Turkey, December 17, 2021. REUTERS / Cagla Gurdogan

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ISTANBUL (Reuters) – Inflation in Turkey’s largest city, Istanbul, jumped in at least ten years last month, according to data on Saturday, and the government of President Tayyip Erdogan has sharply raised electricity and prices across the country for the new year.

Prices have also jumped for petrol, car insurance and some tolls, further straining the economy, which is facing rising inflation and a currency crisis fueled by a series of unorthodox interest rate cuts.

The energy market regulator, citing high global energy inflation, said electricity prices had risen by as much as 125% for high-demand commercial customers and by about 50% for lower-demand households by 2022.

Natural gas prices jumped 25% for residential use and 50% for industrial use in January, national distributor BOTAS said. The price increase for generators was 15%.

In Istanbul, home to about a fifth of Turkey’s 84 million people, retail prices jumped 9.65% a month in December with annual growth of 34.18%, the Istanbul Chamber of Commerce (ITO) said. Household appliance prices rose by more than 20 percent, while food prices rose by almost 15 percent.

Wholesale prices in the city jumped 11.96 percent compared to November with annual growth of 47.10 percent, the ITO said.

Data and adjustments are likely to boost the country’s overall annual inflation rate, which jumped above 21 percent in November and is expected to exceed 30 percent in December and continue to rise, largely due to a currency crash.

The lira fell 44 percent of its value against the dollar last year after falling since September, when the central bank, under pressure from Erdogan, began a series of aggressive interest rate cuts.

Other adjustments included a 20% jump in the cost of compulsory vehicle insurance for those with the highest deductible.

Gasoline prices rose by more than half a lira per liter, while diesel prices rose by 1.29 lira, the Union of Employers of Energy, Oil and Gas Stations (EPGIS) said on Friday.

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