Pricing in the electricity market in Turkey past, present and future

Beside the economic growth and development, it is strictly depended on selling electricity, which is also a necessary good for all citizens; at a price everyone can easily buy in order to make all segments of the society to achieve it easily. In past, electricity price was determined according to costs of electricity State Owned Enterprise?s (KIT), government programs and inflation target while to some extent taking social benefit into consideration at a market structure in which production, transmission and distribution sub-sectors are under the state monopoly. In this vertical integrated structure under the state sovereignty, subsidies and other encouragements provided lower prices relative to present day. Removing state monopoly, liberalization efforts carried by the state and privatizations at the market realized the purpose of creating a market in which state is just acting in transmission sector and leaving production and distribution to private sector on a large scale. After enacting law N.4628, at sub-stage called as ?transition period? a structure in which wholesale market prices are determined to some extent by marginal pricing on the bases of current supply and demand conditions has been created with completing privatisation of production and distribution, and restructure of the market. In the last stage planned to cross in 2013 a structure in which prices are determined by current supply and demand conditions will have been established. It is clear that price of electricity, which is a good necessarily used and determined at such a market, will be different from the prices determined by the decision-making mechanism in the past. It is revealed by several events that in the future electricity prices will increase more in a structure dominated by private sector.Accordingly, it is thought that such an environment in which Turkey will transfer his own decision-making rights firstly to private sector and then to international monopolies with fairly high probability, pricing structure on energy and electricity, which are strategically significant under imposition of European Union and other international organisations, will create serious problems in terms of prosperity and future of the Turkish society.