The art of announcing price hikes…

As price hikes keep piling up, everybody wonders whether the hikes will cause any disruptive effects on inflation targets. But, there’s another thing that’s been bothering me for some time.

As a matter of fact, the drastic hike in electricity price that occurred only a few hours after Minister Albayrak said, “Citizens will see the direct results of economic improvements” in his NEP statement was utterly wrong in terms of timing. I said on television as well that this was almost some sort of “sabotage”. Now, the government will have to deal with this ‘bad timing issue’ let alone the fact that electricity prices have been going up since the beginning of the New Year.

Considering the reaction to NEP press release, I was glad to see that there were only a few negative comments because I want good things to happen as much as I like being honest. But, this sudden price hike did break people’s perception of the integrity of the government. Not to mention that it left some people in a difficult situation, especially people like me who were insisting that this new economic programme must achieve its targets at all costs.

I’ve been telling for quite some time now that all authorities making critical economic decisions must coordinate their press statements. We all know that it is the EPDK (the Energy Market Regulatory Authority) that usually releases such regular price hike announcements by the end of the month, but I wonder:

  • Didn’t anyone think that this thoughtless action could result in negative public reaction? On the other hand, why didn’t EPDK notified the Ministry beforehand of this price hike announcement?
  • Was it really necessary for any regulatory authority to be so strict about the release dates of such news considering that they are perfectly capable of bending the rules whenever they want or need to?

When I asked the officials about this they told me that they didn’t know about this price hike announcement. That’s the exact reason why I keep saying this over and over again: “Managing economy is managing expectations”.

“The art of carrying out duties properly”

In short, it was an unfortunate incident that led to some negative consequences. But first we need to carefully notice the reasons underlying it, especially the bad timing. I don’t think that the EPDK released the price hike announcement in order to attract more positive energy or something. Even though EPDK did it to contribute positively to the income of energy companies, whose debt was recently restructured by banks, the timing of the announcement was completely wrong. This mistake has unfortunately increased suspicions of government’s possible failure to hit the inflation target.

Those who made this price hike announcement can justify themselves by saying, “I was only doing my job” but I know that doing the right thing every time is way important than saying the right thing. It would take, however, a very high level of awareness to achieve that.