Soaring international gas prices are pressuring Turkey to deviate from its anti-inflation program and raise natural gas prices, an official said Monday.
Economists have been warning the government that an increase in natural gas prices would have an unavoidable impact on the anti-inflation program. But Energy Ministry Undersecretary Yurdakul Yigitguden said if oil prices remained high, Turkey would have no choice but to increase natural gas prices, the semi-official Anatolian newsagency reported.
Yigitguden spoke to reporters Monday after a meeting with Swiss Secretary of State for Economic Affairs David Syz.He said if the upward trend in oil prices continued, the government would reflect the cost increase in natural gas prices. However, if oil prices fall there will probably be no price increase in natural gas.
The minister said municipalities should not permit more households to switch to using gas before ongoing energy projects has been completed. Otherwise, he added, a shortage of natural gas and energy would arise.
"I expect that municipalities and gas companies will be increasingly sensitive to this problem," he said.
His criticism was aimed at Ankara Mayor Melih Gokcek, who over the weekend inaugurated a supply of natural gas to a shanty district of Ankara with a lavish ceremony that included a concert by Ibrahim Tatlises. According to a number of economists and union representatives who spoke to the Turkish Daily News and Dunya newspapers, increasing gas prices could push Turkey's inflation rate up considerably.
Dokuz Eylul University economics and administrative faculty lecturer Professor Husnu Erkan was quoted by the Turkish Daily News as saying, ``Gas prices' constraints on the macroeconomic stabilization program could continue, depending on petroleum prices increasing."
Erkan predicted that the target annual inflation rate of 25 percent under the government's program could end up around 40 percent if gas prices due to rising gas prices. He recalled that a barrel of gas cost about $10 within recent memory.
"This figure has reached $34 per barrel, and the stabilization program is being affected by this situation," he said. "If these increases continue, the constraints on the stabilization program will continue because inflation won't go down by the desired amount."
He pointed out that the world went through a gas crisis in 1973-74 and said that he hoped there would no such crisis in the future.Erkan further noted that worldwide reactions to increasing gasprices are continuing and said that these reactions could pull down gas prices to under $30 per barrel. He also stressed that the Organizations of Petroleum Exporting Countries (OPEC) couldn't resist the pressure of these reactions forever.
Echoing Erkan's assessment, Gas, Chemistry, Rubber Tire and Plastic Laborers' Union (Gas-IS) Izmir branch Chairman Gani Gundogdu was quoted in the daily Dunya saying that the increase in gas prices would hurt Turkey's efforts to to wipe out the high inflation that has dominated the country for
about 15 years.
He said that because of these increases, the inflationrate could be 40 percent by the end of the year."Increasing gas prices will effect consumer prices and cause stress in the
markets," he asserted. –(Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)
