Turkey Mulls Higher Energy Bills For Higher-Income Households

(Bloomberg) -- Turkey is working on a plan to set different natural gas and electricity tariffs for different income groups, according to a senior official with knowledge of the matter.

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The Ministry of Energy and Natural Resources has been working on the plan for some time, the official told Bloomberg, speaking on customary condition of anonymity.

The government aims to support lower-income households with lower bills, and implementation would mean energy tariffs may gradually increase as income or consumption rises, the official said.

In an effort to shore up support ahead of crucial elections last year, President Recep Tayyip Erdogan’s government pledged to provide up to 25 cubic meters of natural gas per month to about 20 million households free of charge for a period of one year.

That period ended on May 1, which may add 0.7 percentage points to monthly inflation, according to a central bank analysis.

Turkey’s inflation rate reached almost 70% in April, the fastest in more than a year. The central bank expects inflation to peak in May and then start decelerating, with a year-end estimate of 36%.

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