Turkey's state-owned enterprise BOTAS raised its tariffs by 15% for the industrial and power plants sectors in September. The residential tariff, which had been raised by 12% in July, remained unchanged during August and September. BOTAS surprisingly announced its monthly tariffs in the late afternoon of September 2, and the new tariffs became effective on September 3. The company usually announces its monthly tariffs on its website shortly before the beginning of each month. According to the company's statement, August tariffs would be applied to gas sales during the first two days of the month. 

BOTAS increased its power plant tariff by 15% to 2,369 TL/kcsm from 2,060 TL/kcsm and its industrial tariff to 2,051 TL/kcsm from 1,783 TL/kcsm. The company also raised its truck LNG and CNG sales prices by 15% for September. The historically subsidized residential tariff remained unchanged at 1,488 TL/kcsm. Enerji IQ foresaw a 15% increase in power plant tariffs in its 169th issue published on September 1, 2021.


BOTAS' September 2021 Tariffs
US$/kcsm €/MWh
Russian Gas 240 19.07
Residential 176 13.96
Industry 242 19.24
CCGT 280 22.23

               Note: €/$=1.1826 - €/TL=10.02 - $/TL=8.47

BOTAS' power plant tariff, balanced at 280 US$/kcsm with an 8.47 US$/TL exchange rate, corresponds to €22.23/MWh with 1.1826 €/US$ exchange rate. The power plant tariff is 16.57% higher than the calculated Russian gas import price. However, the Russian gas price no longer represents the rough weighted average cost of gas (WACOG) of the market due to the gap between pipeline gas and spot LNG prices.

The average price of BOTAS' spot LNG cargoes secured for the fourth quarter of 2021 is calculated as TTF+0.67 US$/MMBtu and corresponds to 730 US$/kcsm when accounting for front TTF prices. The share of spot LNG in the last quarter will determine the company's weighted average cost of gas (WACOG).


Easing of monetary policy marks tariff hikes in Q4 2021

Turkey's Central Bank, which underlined a tightened monetary policy after its Monetary Policy Committee (MPC) meeting held on August 12, is now signaling that it will ease policy going forward. The MPC meeting notes released by the Central Bank mentioned the interaction between energy prices and inflation when outlining the policies adopted to fight against inflation. The bank's statement after the MPC was interpreted as likely to limit the increase in gas and electricity tariffs in the fourth quarter in order to support the state's monetary policy. However, the bank's governor's latest statement in September shows that Ankara will likely ease its monetary policy and allow a higher increase in the price of the regulated commodities.