Code for additonal cost on imported fuel lifted in Turkey

ANKARA - Reuters

Turkey imports around 800,000 tons of refined oil products monthly, with diesel accounting for more than 90 percent along with jet fuel and gasoline. REUTERS photo

A recent controversial customs regulation in Turkey that had raised taxes for storing imported fuel and risked reducing the country’s fuel imports was abolished yesterday after criticism from sector representatives.

An article of the regulation, introduced on May 15 and lifted yesterday, had required a sales contract to be drawn up for stored oil, which incurred an additional tax of around 1 percent.

Traders had said that translated to an extra cost of $8-9 a ton for diesel and made Turkey less attractive as an export outlet.

“Everyone’s caught by surprise. We’re waiting to see a reversal,” a European trader who regularly sells to Turkey had said.Resource-hungry Turkey imports between 700,000 to 800,000 tons of refined oil products monthly, with diesel accounting for more than 90 percent along with jet fuel and some gasoline.

Along with oil majors, leading oil traders such as Vitol, Trafigura, Glencore and Gunvor also bring oil cargoes to Turkey. Some of these traders have grain imports as well.

It is common practice among Turkey’s leading fuel retailers, which include big oil companies like France’s Total, Royal Dutch Shell, BP and OMV AG collectively to bring cargoes, deliver them to oil storage and then distribute as it is more profitable that way.

 “It is not only the energy sector but other importers as well that have voiced their opposition to this additional tax burden,” a customs official familiar with the matter had said earlier.