Price hikes coming to "cheap" Azerbaijani gas as well ın 2010

The state-owned Turkish Pipeline Corporation (BOTAŞ) is to issue a new list of natural gas prices in accordance with Treasury forecasts for 2010 -- which means an initial price hike for consumers should arrive in February.

According to calculations, in parallel to increased prices for unrefined oil and also rises in exchange rates, a price hike of around 50 percent is on its way. According to information obtained by Today's Zaman, there is another important dimension to the changes in store for 2010  -- natural gas from Azerbaijan, bought last year because of its low price, will also become more expensive.

The Azerbaijanis are insisting on the implementation of the price difference in the new year. According to revised BOTAŞ figures, the Azerbaijani gas purchased in the first quarter of last year for its economical pricing will end up costing $399 per cubic meter. This figure is going to have a serious impact upon BOTAŞ’s budget, but the firm has not issued any statements regarding Azerbaijani natural gas or pipeline capacity.

The decrease in recent years in natural gas consumption has been expensive for Turkey. Turkey has to pay for gas that it agreed to purchase even if domestic demand is insufficient to meet the amounts of gas specified in trade agreements.

Under pressure from the Treasury and Finance Ministry, BOTAŞ hiked natural gas prices by 73-75 percent for domestic and industrial use last year. Consumers tightened their belts, using heaters at home less, and with reductions in industrial use as well, gas sales slowed and the pledged amount of gas was not purchased. In 2008, Turkey paid Iran $704 million for gas it did not use. As natural gas usage did not rise in 2009, it has emerged that Turkey will spend another $1.5-2 billion in this way.

BOTAŞ must either use the gas or pay for it with its Iranian agreement, and is also tied to Azerbaijani gas for its cheaper price. Energy and Natural Resources Minister Taner Yıldız had previously said in an announcement with regard to Azerbaijani gas that an extra $600 million was at risk with regard to Iranian gas.

/Todays Zaman/