New customs rule lifts imported fuel costs

New customs rule lifts imported fuel costs

ANKARA - Reuters
New customs rule lifts imported fuel costs

Taxes imposed on storing imported fuel have been raised around by 1 percent, which threat the operations of global oil giants in Turkey, officials say. DHA photo

A new customs regulation in Turkey that has raised taxes for storing imported fuel and risks reducing the country’s fuel imports could soon be amended, customs officials said yesterday.

The new regulation, introduced on May 15, requires a sales contract to be drawn up for stored oil and incurs an additional tax of around 1 percent.

Traders say that translates to an extra cost of $8-9 a tonne for diesel and makes Turkey less attractive as an export outlet.

“Everyone’s caught by surprise. We’re waiting to see a reversal,” said a European trader who regularly sells toTurkey.

Resource-hungry Turkey imports between 700,000 to 800,000 tonnes 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 toTurkey. Some of these traders have grains imports as well.

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

Traders say retailers have been lobbying for the past few weeks, and their efforts may bring results.

Traders hope for a speedy change in the regulation, as it appears to have already choked off some purchases.

“This is something that will completely kill off the transit oil trade and could only be beneficial for the local refiner,” one Turkey-based trader said.