Turkish business group chair says fuel price hikes hurt fight against high inflation

The chairman of the Confederation of Turkish Tradesmen and Craftsmen (TESK) said fuel price hikes disrupts efforts to reduce inflation, secular opposition daily Cumhuriyet reported on Sunday.

The Turkish government is seeking to reduce inflation through various unorthodox measures including selling cheap food in city squares and cutting loan rates at state-run banks following an economic contraction.

The unconventional steps, which have increased this year, have had little effect on curbing price increases, partly because the lira has lost about 5 percent of its value against the dollar since January. Inflation was an annual 20.3 percent in December.

And renewed hikes in power prices seriously cripple the attempts against high inflation, Bendevi Palandöken said, adding that Turkish authorities have already raised the price of gasoline 12 times and diesel oil 8 times in this year.

"These hikes adversely affect all sectors and citizens, and increase inflation. A real solution should be a discount, not a price rise," the TESK head said.

Turkey has long had among the most expensive petrol prices in the world despite proximity to many of the world's biggest oil-producing countries, due to the high rates of tax it collects on the fuel.