Europe reels as energy prices soar
Pain being felt from Poland to U.K.
ISTANBUL — Mehmet Bogday says his jaw dropped when he saw his electricity bill — it was higher than the rent he pays for his Istanbul restaurant selling traditional Turkish wraps, and more than double what he paid a month ago.
“This is unsustainable,” said Bogday, who owns the Asmali Mescit Durumcusu restaurant. “If it continues this way, we will have to lay off staff. If it continues this way, we won’t be able to make this work. We’ll either downsize or close and go sit at home.”
Spiking energy prices are raising utility bills from Poland to the United Kingdom, leaving people struggling to make ends meet and small businesses uncertain about how much longer they can stay afloat. Governments across Europe are rushing to pass aid to ease the pain as energy prices drive a record rise in inflation.
Nowhere is that squeeze felt more acutely than in Turkey, where inflation has soared to nearly 50 percent and exorbitant electricity bills are stirring protests and fears about how small businesses can survive.
Protests over electricity price hikes broke out across Turkey this week, including some where police fired tear gas to disperse crowds. People are posting their electricity bills on social media to show how costs are untenable.
Shopkeepers are displaying notices decrying high bills on shop windows, while others have gathered outside electric companies and set their bills on fire.
As Europe’s energy demand roared back from the depths of the coronavirus pandemic, it ran up against gas reserves sapped by a cold winter last year, a lack of renewable energy generation over the summer and Russia not selling as much gas as usual to Europe.
It’s led to a cost-of-living crisis in some places, but especially in Turkey, where households and businesses were already reeling from eye-watering inflation and a currency that lost some 44 percent of its value last year, eating away savings and making it difficult to buy even basics like food. Authorities then raised electricity tariffs Jan. 1, spiking prices by 50 percent for many people and as much as 127 percent for businesses and high-consumption households.
Faced with mounting criticism, President Recep Tayyip Erdogan made changes this month so the price increases kick in when households use more energy, but it’s failed to provide relief.
In Britain, energy prices are set to go up by a record 54 percent — some $940 per year — starting in April.
Likewise, Italian households are bracing for a record 55 percent increase in electricity and 42 percent in gas in coming weeks, energy regulators say.
Polish regulators approved energy prices going up by 37 percent this year.
In Turkey, energy woes are aggravated by the president’s policies. Erdogan has shunned conventional economic thinking and pressured the central bank to lower interest rates despite inflation at a 20-year high.
Cengiz Sur, owner of a bar and restaurant in Istanbul, said he has been unplugging refrigerators and heaters and turning off lights after his power bill this month surpassed his rent.
“We’ve forgotten about rent and are now trying to figure out how to deal with our electricity bills,” he said.