ANKARA, Aug 1 (Reuters) - Turkey raised its natural gas prices by nearly 20 percent on Friday in line with a new cost-based pricing mechanism, state pipeline company Botas said, announcing a move likely to increase already high inflation.
Analysts said the price rise was set to push up annual consumer price inflation, which was up 10.6 percent year-on-year in June, by 0.2-0.5 percentage points. Turkey has an official end-year target of 4 percent, which has long been out of reach.
The gas price rise was fixed at 16.88 percent for residential properties and 18.77 percent for industry, Botas said.
The cost-based pricing mechanism, introduced by the High Planning Board from the start of July, applies to all state energy companies and is seen as an important step before further privatisations of power distribution and production facilities.
Before the new system was introduced, electricity prices for industry were raised by 22 percent effective from July. Electricity companies have not applied to set new power tariffs this month.
Rises in energy prices generally have been a major component in Turkey’s double-digit inflation.
The central bank, which has raised interest rates this year and said it could tighten further, has repeatedly cited energy prices as an inflation risk. (Reporting by Orhan Coskun, editing by Anthony Barker)