Türkiye is planning to eliminate government subsidies for high-volume residential electricity consumers starting in February of next year and will introduce cost-based pricing, Energy and Natural Resources Minister Alparslan Bayraktar said Wednesday.
"With the latest regulation made by the energy regulator, citizens and residences with more than twice the monthly average consumption, namely 417 kilowatt-hours, will start paying the real cost of electricity after February," Bayraktar said.
Speaking to reporters in Ankara, Bayraktar said the planned regulatory change aimed to target government subsidies to citizens who need them most.
Subsidies will continue to be applied to households consuming around 200 kilowatt-hours monthly, with no increase in prices expected through January, said the minister.
Those consuming more, potentially due to larger homes or extensive appliance use, including electric vehicles, will face adjusted pricing aligned with true energy costs.
Out of around 40 million residential electricity users, high-consumption users constitute about 3% of the total, Bayraktar said.
Exceptions will remain, according to the minister, with continued subsidies for religious establishments.
Türkiye has subsidized electricity usage for years, and government officials have repeatedly said that Turkish households have cheaper energy than in neighboring countries.
"These are the high consumption users, those with larger houses ... and those who have electric vehicles, and these will also pay the electricity price more in line with its cost," Bayraktar said.
Last week, the International Monetary Fund (IMF) said it would encourage Türkiye to push ahead with further reducing costly energy subsidies while buffeting poorer households against the fallout.
A mix of unanchored inflation expectations and large energy import needs made Türkiye more vulnerable to a quicker and broader feed-through to inflation from possible energy shocks, Jim Walsh, the IMF mission chief for the country, said.
Walsh added that Türkiye could counter that by ramping up renewable energy production.
Tight policy, fiscal measures and base effects brought annual inflation down to 49.38% in September from a peak of 75.45% in May.
The central bank expects disinflation to gain pace and forecasts an end-year rate of 38%. The bank sees it easing to 14% next year.