Botas Suffers Record 1 Billion Loss as Turkey’s Energy Subsidies Backfire

Turkey’s state-run energy company Botas reported a record loss of USD 1 billion (around 1.85 billion BGN) in 2024, as government policies kept natural gas prices below market levels, according to the 2024 Public Enterprises Report from the Treasury and Finance Ministry.

The report shows that losses among state-owned enterprises surged under price control measures designed to shield households from rising energy costs. These policies increased the fiscal burden, with state-owned firms receiving treasury transfers to offset losses incurred from selling below cost. Treasury spending on these compensations rose 55.4 percent in 2024, reaching 279.2 billion liras (USD 8.7 billion / 16.1 billion BGN). Botas accounted for 23.6 percent of these payments, second only to the Electricity Generating Corporation (EÜAŞ), which received 70.4 percent. The financial strain at Botas stems from sales costs of 735.9 billion liras exceeding gross sales revenues of 733.6 billion liras.

The figures underscore the government’s ongoing use of energy subsidies to dampen inflationary pressures for consumers, but at the cost of making Botas the worst-performing state enterprise, surpassing Turkish State Railways (TCDD) in losses. Other state-owned firms also posted large deficits: TCDD reported 36.6 billion liras in losses, its subsidiary TCDD Transport 25.1 billion liras, Turkish Coal Enterprise (TTK) 12.7 billion liras, while EÜAŞ ended the year with 12.4 billion liras in losses.

The report highlighted that compensation for lost income to state-owned banks and the Agricultural Credit Cooperative surged 237 percent in 2024, reaching 125.3 billion liras (USD 3.9 billion / 7.2 billion BGN), reflecting the fiscal costs of government intervention in credit markets.

Not all state enterprises posted deficits. Turkish Electricity Transmission Corporation (TEİAŞ) reported a profit of 38.8 billion liras, while mining firm Eti Maden earned 29.3 billion liras. Despite these gains, the combined net loss across Turkey’s 19 state-owned enterprises totaled 56.6 billion liras (USD 1.76 billion / 3.26 billion BGN) for 2024, highlighting the broader strain on public finances.

We remind you that a 13‑year supply and transit contract signed in January 2023 by the Bulgarian caretaker government obliges state supplier Bulgargaz to pay roughly BGN 1.05 million a day (about €540 000) to BOTAŞ for gas transmission capacity, regardless of whether the gas is delivered or not. Since the vast majority of that capacity remains unused, Bulgaria is effectively paying for an idle infrastructure. As a result, Bulgargaz has been decapitalised, under heavy debt burden, and the deal has placed significant financial strain on the state energy sector.