Monday 25 June 2018

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

Tags: EU | Jet fuel | import | Mideast |


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