Why in the Energy Corridor (Turkey) natural gas is more expensive than Europe?
Although Turkey comes to the central position as the energy corridor, Turkey in the 29 EU countries (including Turkey and Uk) has the most expensive price of natural gas which ranked as #9. In the same period ( 2018–2020) Turkey had raised the gas price higher than other EU countries. European countries are paying 110–120 USD per thousand cubic meters of natural gas however in Turkey that numbers are 250–280 dollars. This situation is directly reflected in people pockets, they cannot use natural gas comfortably. Okay, but why?
#Azerbaijani gas is delivered gas via #TANAP to Europe via Turkey, which is the price of gas 12% less than Russian gas, but transportation operations cost two times more EU countries.
(The energy corridor has different benefits to the #Turkish economy, I will discuss it in another article.)
The underlying reason is about how countries make their natural gas contracts. Turkey, a rate of 80–85 per cent based on the price of oil and gas deal by making a long-term deal. This means that if oil prices fall, the price of gas will also fall. Although it sounds good, long-term contracts keep prices very high. In other words, even if the price decreases, it can be reflected after 9 months as per the agreement. However, unlike natural gas resources to compete with the network of European countries ‘pump up’ turns profitable, and so prices are lower by half than in Turkey.
For example, in 2005, when European countries made their natural gas agreements 80 per cent based on petroleum, this rate fell below 30 per cent in 2018.