Turkey to Target Energy Subsidies, Raise Power Bills for High-Consumption Households

ISTANBUL, Oct 15, Turkish press  – Turkey is preparing to overhaul its system for utility billing, shifting to a consumption-based tiered tariff model for both electricity and natural gas with the explicit goal of directing government subsidies away from high-income, high-consumption households.

Energy and Natural Resources Minister Alparslan Bayraktar announced the planned changes, which will redefine the limits for subsidized consumption, forcing high-volume users to pay the full market price.

The Two-Tier System

The reform will primarily affect the electricity tariff system, which currently provides a subsidized rate for residential consumption up to an annual limit, widely cited at 5,000 kilowatt-hours (kWh).

Bayraktar stated that a new, likely lower consumption limit would be set by the end of October.

• Impact on the Majority: The Minister said the measure is aimed at targeting support to citizens who need it most. The vast majority of Turkish citizens—estimated at around 97% of residential subscribers—consume below the current or anticipated new threshold and are expected to remain unaffected by the price hike.
• Hike for High-Volume Users: The changes are set to remove the government subsidy entirely for approximately 1.2 million households (3% of subscribers) who exceed the revised limit. These households will then be billed at a significantly higher tariff, comparable to those charged to industrial or commercial facilities.
• Protecting the Poor: The policy is designed to ensure that subsidies, which currently cover a significant portion of energy costs, are retained for lower-income families and retirees, protecting them from cost increases.

Natural Gas Changes

In addition to electricity, Bayraktar announced a similar consumption-based tiered structure for natural gas. This new gas tariff will also feature regional and seasonal variations to account for higher heating demand in colder cities during winter months.

The government maintains that the move is a necessary step to better manage a state budget under pressure from subsidizing energy costs and to promote energy efficiency among its wealthiest citizens.