Turkey secures 10.25 discount on Russian gas, says energy minister

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Turkey has secured a discount of 10.25 percent in the price of what it pays for Russian gas, but consumers won’t see any changes in their utility bills due to the current weakness of the Turkish Lira, Energy Minister Taner Yıldız said on Feb. 27.

“We finalized negotiations with Russia’s Gazprom yesterday and the point we reached was a 10.25 percent reduction in gas prices,” Yıldız said in televised remarks.

He described the discount as “valuable and significant,” but added that the reduction would not yet be reflected on citizens’ gas bills because “the rise in the U.S. dollar is much higher than the discount we got.”

The lira hovered near record lows on Feb. 27 as investors continued to worry about whether Central Bank Governor Erdem Başçı would stay in his post amid President Recep Tayyip Erdoğan’s blistering criticism of the Bank. The dollar, meanwhile, was boosted by stronger-than-expected U.S. durable goods orders.

The lira reached 2.5150 against the dollar at noon, weaker than 2.4960 late on Feb. 26 and approaching the all-time low of 2.5155 that it hit two weeks ago.

Russia offered a 6 percent gas price discount to Turkey in December, but the Turkish side said the offer was not final and talks would continue.

Meanwhile, Yıldız also said the new prices would allow state-run grid operator BOTAŞ to make up for its prior losses, paying its debts to the customs and the finance authorities.

“BOTAŞ will have a much better cash flow by June 2015 with the positive effects of the new price. We expect more improvement if we take a decision from Iran’s arbitration on the behalf of us,” he added.