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Turkish Energy Undersecretary’s “read my lips” moment

Turkish Energy Undersecretary Metin Kilci was quoted by Turkish daily Hurriyet as saying that natural gas prices would not be hiked this year.

Since Turkey imports its natural gas, the government has to raise prices when the lira depreciates, as you can see in a graph of natural gas prices and USDTRY:

The Undersecretary is in effect saying “read my lips, no new taxes“! Unless the lira miraculously appreciates, we will be probably seeing a hike to natural gas prices of at least 15 percent once the local elections at the end of March are over- especially since prices have been kept constant since October 2012, during which time the lira depreciated 21 percent against the dollar (28 percent against the euro). Of course, global natural gas prices would affect Turkish prices as well, but they are significantly higher than what they used to be a year ago.

Just wanted to clarify- in case you are in the process of updating your Turkey inflation projection for 2014!:)

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