Adjustment of natural gas to the inflation account by TURKSTAT

The Turkish Statistical Institute (TUIK) warned that when calculating inflation data for May, the government would take into account that natural gas is distributed free of charge, and that this practice would have a “strong effect” on the inflation.

Among the promises of President Tayyip Erdoğan before the elections were the free distribution of natural gas in May and the free distribution of 25 m3 of natural gas consumed by each household until May next year.

THE ‘ZERO PRICE’ METHOD WILL BE APPLIED

In the statement made by TURKSTAT last night, referring to the decisions of the statistical institution of the European Union, Eurostat, it was stated that “the ‘zero price’ method will be applied for natural gas in the scope of the calculations of the CPI for May 2023”. The statement also indicated that not charging for 25 m3 of natural gas would be reflected in the calculations.

TurkStat also gave information on the estimated effect of this practice, saying: “It is anticipated to have a strong downward effect in May 2023, but this effect will be strong and upward, especially towards the end of the year, in parallel with the increase in the amount of natural gas consumption”.

HOW MUCH DOES IT AFFECT INFLATION?

Natural gas has a weight of 2.9 percent in the inflation calculation. May inflation will be announced on Monday, June 5.

Bilkent University faculty member Hakan Kara stated in his Twitter post that inflation could be zero or slightly negative in May, saying, “It will probably bring monthly inflation down by about 2.4 points.” (Reuters)