Turkey's power prices are expected to increase in 2016 because of higher costs of production, distribution and transmission, according to Limak Energy's CEO on Monday.
"We expect an increase in electricity prices due to higher costs in distribution, transmission and retail costs," CEO Birol Erguven told Anadolu Agency on Monday.
The last price hike seen in Turkey's natural gas and electricity market occurred on Sept. 30, 2014 with a nine percent increase.
The then Energy Minister Taner Yildiz also has said that one of the reasons for the increase was in losses with exchange rates in the energy trade. The Turkish state buys energy in dollars and sells in Turkish lira. If the value of the dollar rises then the state has to make up the difference with a price hike.
"High exchange rates with the dollar is a huge disadvantage for the energy sector", Yildiz had said then.
Last week Iran decreased natural gas levels via pipeline to Turkey while some claim that the power price hikes are due to the ensuing decreased levels of power available.
Erguven countered such claims, and said that the day-ahead market's price may increase, but in the end, it will not affect the price to the end consumers because a one or two day increase is very little relative to prices over a 365 day period.
Last Tuesday, Iran decreased nearly 50 percent of its natural gas transfer to Turkey from an average daily output of 28 million cubic meters down to 13-14 million cubic meters.
By Huseyin Erdogan