Turkish BOTAŞ reportedly got $400m loan for gas bills

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Turkey’s energy importer secured a $400 million loan to finance its natural gas bills, according to a report on Thursday.

The report came a day after Turkey reportedly nearly completed talks with Deutsche Bank AG for a 1 billion euro ($1.1 billion) loan to finance liquefied natural gas (LNG) purchases.

The loan will be used by Petroleum Pipeline Corporation (BOTAŞ) to purchase LNG from US producers and European traders, Bloomberg News said.

The short-term $400 million loan was secured from two local banks, Bloomberg said, citing people familiar with the matter who asked not to be identified because the deal is confidential.

If secured, the €1 billion would mark BOTAŞ’s first loan deal for LNG purchases and is said to pave the way for similar deals that will allow it to diversify supplies currently dominated by Russia. and Iran.

The reports come as pressure builds on BOTAŞ to raise prices further amid soaring global energy costs.

The government has subsidized a significant amount of utility bills in a bid to ease the burden of soaring consumer prices on households, but further price hikes seem inevitable due to rising oil prices. energy.

Turkey chose to keep prices for households stable and to increase the prices of gas sold to industrial installations and power stations.

Turkey imports almost all of its energy needs. BOTAŞ bought billions of dollars from the central bank to cover its purchases.

So far, BOTAŞ has kept its gas prices to consumers and industry well below the $830 per thousand cubic meters it pays in April. It said its latest price increases on April 1 still left households with an effective subsidy of 70%.

Since the end of 2020, BOTAŞ has increased the price of natural gas for industry by 568% in Turkish lira, according to Reuters calculations. This reflects a 49% fall in the lira against the dollar during this period, in addition to rising global energy prices.

The cost of Turkey’s energy imports doubled in January and February from a year ago, to $16.6 billion, driving the country’s trade deficit up 135 percent.

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