Soaring global energy prices are forcing Turkish state-owned energy importer BOTAS to keep raising prices, Reuters reports.

BOTAS needed 100 billion liras ($6.8 billion) from the treasury last year to cover the shortfall, and losses accelerated after the Ukrainian crisis pushed up energy prices, officials say.

This creates several problems for the authorities in Turkey, which imports almost all of its energy needs. BOTAS bought billions of dollars from the Central Bank to cover its purchases, undermining the bank's already low foreign exchange reserves, while BOTAS' treasury payments add to the budget deficit.

Any price increase imposed by BOTAS on Turkish industry could hurt the government's drive for export-led economic growth, as well as keep upward pressure on inflation, which has risen above 60%.

Four industrialists, who represent gas and electricity-intensive sectors such as steel, ceramics and cement, said the sharp rise in costs would drive up the prices of their goods.

So far, BOTAS has kept gas prices for consumers and industry well below $830 per thousand cubic meters. Its latest price increase on April 1 still left households with an effective subsidy of 70%.

Since the end of 2020, BOTAS has increased the price of natural gas for industry by 568% in lira, Reuters estimates. This reflects the 49 percent depreciation of the Turkish lira against the dollar over this period, amid rising global energy prices.

Despite the increase, BOTAS lost billions of dollars in the first quarter. If the current figures hold until the end of the year, losses are expected to rise exponentially, said a source close to the matter.

BOTAS's balance sheet problems mean that even with continued support from the Treasury of 14.7 billion liras in February, the company has struggled to borrow from banks, he said.

The government prefers not to raise prices, which will maximize inflation, but there are serious costs associated with commodity prices, the source said.

The value of Turkey's energy imports doubled in January and February year-over-year to $16.6 billion, widening Ankara's trade deficit by 135%.

In February alone, BOTAS and other government agencies bought a record $5.37 billion worth of foreign currency from the Central Bank.

The industrialists have asked the government for support, including an 18 percent VAT cut in Turkey, to help them cope with higher gas prices, a senior government official said.

They also warned that further increases in energy prices would weigh on commodity prices, further fueling inflation and limiting the competitiveness of Turkish businesses.