ANKARA - Reuters
A jump in global crude oil prices and a depreciating Turkish lira could add $2 billion to Turkey's already ballooning energy bill in the second half of the year, Turkish economic officials said on Wednesday.
Turkey is almost completely dependent on imports to meet its energy needs. Its oil and gas purchases have been the driving factor behind the widening of its current account deficit to more than 7 percent of national output.
The government has forecast energy imports to be $59.6 billion for the whole of 2013, almost unchanged from $60 billion last year, but officials say Turkey is likely to overshoot the target.
"There will be a serious increase in costs, both due to the rise in oil prices and the dollar. If both the dollar and oil stay at these levels, the additional cost could be around $2 billion," one of the government officials said.
They Turkish lira hit a record low of 2.07 against the dollar last week as emerging market currencies have come under pressure on concerns that the U.S. Federal Reserve will soon start reducing its monetary stimulus, which has led to an inflow of cheap cash into riskier markets.
The lira has been particularly vulnerable because of Turkey's already large current account deficit as well as investor worries over its central bank's policies, such as ruling out interest rate hikes to defend the lira.
The lira's weakness has coincided with a jump in global oil prices. Brent crude oil rose nearly 3 percent last week, the biggest weekly gain since early July, on worries that a strike by Western forces against Syria would rattle the Middle East and disrupt oil exports when markets are already coping with the loss of supplies from Libya and Sudan.
On Wednesday, Brent held above $115 a barrel.
The rise in oil prices in August already imposed an additional financial burden of around $300 million on Turkey, energy minister Taner Yildiz said last week.
He added that the price had to come down by around $10 a barrel for Turkey's oil demand to continue growing.