EU Mideast jet fuel imports to escape new duty
Brussels, May 11, 2013
The European Union's jet fuel imports from the Middle East are likely to escape a tariff that would have raised prices from next year, thanks to a waiver, EU sources and traders said.
Leading Middle East oil producers are to lose a preferential status, aimed at helping developing economies, that had let them off jet fuel import duty.
Starting January 1, 2014, changes to the EU's generalised scheme of preferences (GSP) will mean that they will no longer be exempt from 4.7 per cent duty.
The additional charge could deal a heavy blow to an already weakened market, which has felt the impact of the region's economic slump more than other distillate fuels, such as diesel or heating oil, traders said.
However the EU will waive the duty on jet fuel imports if they meet specified quality criteria, EU sources said.
"The 4.7 percent duty on jet fuel is brought down to zero if the importer submits a so-called airworthiness certificate at the time of the import. That's true for all EU trade partners - and will apply to Gulf Cooperation Countries as of Jan. 1, 2014," one of the EU sources said.
In order to obtain an airworthiness certificate, jet cargoes must meet the standard European specification, be traceable to the country of origin and batch-numbered, traders said.
"It would appear very silly if suddenly the EU imposes a tax on jet imports. Surely that would be shooting themselves in the foot, given that Europe is short on distillates," one jet trader said.
"The EU will have to remove the duty because it will hinder their trade deficit," a second trader said.
European demand for jet fuel stood at 1.19 million barrels per day (bpd) in 2012, of which one third is imported, mostly from the Middle East, according to the International Energy Agency (IEA).
Last year, 33 countries were removed from the EU GSP scheme which now includes 89 states, mostly in Africa, Asia and Eastern Europe.
The changes will affect imports from countries including Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the United Arab Emirates, which account for around 60 percent of Europe's jet fuel imports.
Jet fuel traded at around $923 a tonne on Wednesday on the European wholesale barge market.-Reuters
More INTERNATIONAL NEWS Stories
- Missing jet may have strayed to Andaman
- Gold hits near 6-month high
- 2 killed in Manhattan building blast
- Cameron pushes for travel bans on Russian MPs
- Indian coastguards join Malaysia jet search
- Confusion as search for lost jet spreads
- Military denies lost plane's flight to Malacca
- Investors monitoring Pimco after internal strife
- N Korea tanker ‘leaves Libya rebel port carrying oil’
- Malaysia plane incident not terror related: Interpol
- Crimea closes air space to commercial flights
- Missing Malaysian plane last seen At Malacca Strait
- Stolen passport holder on missing plane is Iranian
- China deploys 10 satellites to search for Malaysia jet
- Libya says halts tanker outside port; rebels deny it
- Libya orders military force to 'liberate' ports
- Big bananas: Chiquita, Fyffes merge
- Radar sweeps, dozens of aircraft, but no sign of plane
- N Korea tanker loads oil at Libya rebel port
- Gold drops as US growth optimism weighs
- Merkel raps Putin; Russia tightens grip on Crimea
- World 'at sea' over missing Malaysian jetliner
- Passports requiring probe were on Malaysia flight
- 40 killed in Yemen as Houthi fighters near capital
- Vietnam finds object in sea; search on
- $5bn poll spend to boost India economy
- Libya authorises use of force against Korean tanker
- Ukraine PM says he will go to US to discuss crisis
- Syrian journalist killed covering fighting
- Malaysian jet may have turned back before vanishing