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Türkiye's Gas Market Reform: A Hybrid Institutional Pathway for Competition and Resilience

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  • Arinc, Ibrahim Said

    (SOCAR Türkiye)

Abstract

This paper analyzes Türkiye's natural gas market reform through the lens of institutional path dependence, demonstrating the failure of textbook liberalization strategies in a system marked by embedded support structures and geopolitical constraints. The delayed restructuring of BOTAŞ and the absence of a clear segmentation framework prevented the emergence of a well-functioning domestic market, constraining price formation and liquidity, and ultimately hindering Türkiye's hub potential. To address this structural gap, this study proposes a unique hybrid institutional pathway operationalized through a novel Dual-Ring Model. This model segments gas supply between a regulated Guardian Ring (for vulnerable consumers) and a market-based Competitive Ring, fostering traded liquidity and authentic benchmark pricing. Drawing on the "second-best" institutional approach and the principle of "embedded autonomy", the framework argues against full liberalization. The AggregateTR procurement mechanism coordinates strategic state bargaining power, notably leveraging the critical 2026–2030 contract rollover period, with transparent competitive allocation. Two original Structural Market Indicators (SSDI and TVR) monitor support targeting and traded liquidity. Scenario-based analysis demonstrates how disciplined segmentation and phased support recalibration, including the strategic release of Sakarya Domestic Gas Production into the Competitive Ring, progressively balance supply security, affordability, and benchmark credibility. This framework provides a resilient hybrid gas market architecture grounded in Türkiye's structural context, offering actionable insights for the critical 2026–2030 contract rollover window and the subsequent post-2030 market design. The approach offers replicable lessons for other gas import-dependent emerging economies, reconciling liberalization with strategic state coordination.

Suggested Citation

  • Arinc, Ibrahim Said, 2026. "Türkiye's Gas Market Reform: A Hybrid Institutional Pathway for Competition and Resilience," SocArXiv sg9ym_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:sg9ym_v1
    DOI: 10.31219/osf.io/sg9ym_v1
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    References listed on IDEAS

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