Gas prices witness nine jumps so far this year

ISTANBUL - Hürriyet Daily News

An attendant adjusts a pump at a gas station in central Istanbul. Gas prices have increased 0,34 Turkish Liras this year, hitting a record of 4.7 liras in late March. DAILY NEWS photo

Gas prices in Turkey have been raised nine times since the beginning of the year. The total increase in gas prices over this period amounts to 34 kuruş, or 0,34 Turkish Liras, pushing the per-liter price closer to the record-setting threshold of 5 Turkish Liras.

The year’s first gas price hike was on Jan. 10. There have been nine price hikes and seven reductions since then, three of which were in August. The latest hike was on Aug. 22.

The price of one liter of gas is at 4.58 liras, up from 4.22 liras in January. It now costs 229 liras to fill a 50-liter gas tank with 95-octane gas, up from 211 liras in January. The per-liter price of 97-octane gas, which is at between 4.65 liras and 4.56 liras now, was between 4.54 liras and 4.56 liras in the country’s largest three provinces before the price hikes. Gas prices hit a record level of 4.7 liras at the end of March.

Gas prices in Turkey are automatically updated according to changes in benchmark crude oil prices in the Mediterranean basin.

Turkey has the second-highest gas prices in the world, after the wealthy Scandinavian country of Norway, and is followed by Israel. One liter of gas sells for the equivalent of 4.89 liras in Norway and 4.51 liras in Israel. The per-liter gas price in Turkey’s western neighbor Greece, which is grappling with a debt crisis, is 4 liras. In the U.S. a liter of gas goes for about 1.79 liras.

Oil fell below $115 a barrel on Aug. 24, as signs of weakness in the global economy weighed on the demand outlook, although a host of supply-side concerns kept losses in check, according to Reuters. Crude was still heading for a fourth weekly gain because of lower exports from Iran, a drop in North Sea supply due to oilfield maintenance, and the risk of weather-related disruption of Gulf of Mexico output. Brent crude was down 38 cents at $114.63 a barrel by in the morning trade, up about 0.8 percent for the week. U.S. crude eased 58 cents to $95.69.

Inflation expectations deteriorate slightly

The Central Bank’s second survey on inflation expectations in August indicates a slight deterioration. The market expectation for year-end consumer price inflation is at 6.77 percent, up from 6.73 percent in the first monthly survey. The 12-month consumer price inflation expectation was 6.69 percent, up from 6.68 percent.

“We think recent increases in global energy and soft commodity prices have made participants a little bit cautious on the inflation front. The year-end consumer price inflation forecast for the market … is above the Central Bank’s revised year-end inflation forecast of 6.2 percent; and more importantly, it is significantly above the 5 percent inflation target. The same is also true for medium- and long-term inflation expectations. We are maintaining our off-consensus year-end consumer price inflation forecast at 8.7 percent, under the assumption that the annual average petroleum price will be $115, and the year-end U.S. dollar-to-Turkish Lira exchange rate will be 1.8900 this year,” said BGC Partners Chief Economist Özgür Altuğ on Aug. 24 in a note to clients.