Turkey raises energy prices; Istanbul’s monthly inflation is the highest in a decade, according to Reuters

ISTANBUL (Reuters) – Inflation has risen sharply in Turkey’s biggest city Istanbul for at least a decade last month, according to data on Saturday, and President Tayyip Erdogan’s government has significantly boosted electricity and prices for the whole year for the new year.

Prices also rose for gasoline, car insurance and some tolls, adding to further tensions in the face of rising inflation and an unorthodox reduction in interest rates in the face of the currency crisis.

The Energy Market Regulatory Authority, citing high global energy inflation, said electricity prices had risen by 125% for high-demand commercial users and about 50% for low-demand households by 2022.

Natural gas prices rose by 25% for domestic use and 50% for industrial use in January, according to national distributor BOTAS. The price was a 15% increase for electricity generators.

In Istanbul, home to about five-fifths of Turkey’s 84 million population, retail prices rose 9.65% month-on-month in December, up 34.18% year-on-year, according to the Istanbul Chamber of Commerce (ITO). Household prices rose by more than 20% and food prices rose by almost 15%.

The city’s wholesale price has risen by 11.96% since November, up 47.10% year-on-year, according to the ITO.

The data and adjustments are likely to boost the country’s overall annual inflation rate, which rose from 21% in November to 30% in December and is expected to rise even further, largely due to the currency crash.

The lira depreciated 44% of its value against the dollar last year after falling in September when the central bank, under pressure from Erdogan, began some aggressive rate cuts.

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

Gasoline prices rose by more than half a pound per liter, while gasoline prices rose by 1.29 pounds, the Energy, Oil, Gas Station Employers Union (EPGIS) said on Friday.