TURKEY DATA: Diesel, gasoline demand up sharply over first 25 days of July

Istanbul — Turkish diesel demand over the first 25 days of July rose 6.1% year on year to 1.589 million liters, energy ministry data showed.

The increase is below the 8.2% reported in June, but still a stark contrast to the fall of 27.7% in May, when travel restrictions imposed in the wake of the coronavirus pandemic were still in place.

Gasoline demand over the first 25 days of July totaled 267 million liters, up 22.5% year on year, and in contrast to declines of 2.1% in June and 32.4% in May.

The continuing increase in diesel sales comes alongside a rebound in the Turkish freight transportation market, with the economy reopening and the use of intercity buses in the period increasing in the run-up to the Eid holiday, which officially runs from July 31 to August 3. It also coincides with the period when many Turks decamp to summer houses through August.

Similarly, the continuing sharp rise in gasoline sales reflects the fact that many businesses continue to operate with non-essential staff working virtually from home, which in turn has allowed many to decamp early from the cities.

The bulk of gasoline consumption in Turkey is from higher-end passenger vehicles, with the sharp fall in demand from April through June thought to reflect a large number of people who normally commute to work, working from home.

Turkish daily Milliyet reported July 21 that 90% of Turkey's rental cars had already been rented ahead of the Eid holiday, as Turks who do not own cars attempt to avoid using mass transportation.

Demand for both diesel and gasoline reflects the performance of the broader Turkish economy, which began to recover in the last quarter of 2019, and prior to the coronavirus pandemic had been expected to grow further in 2020.

The weekly data includes daily consumption figures and is subject to revision.

Refinery output

Turkey's two refiners Tupras and Socar both responded to the pandemic by implementing changes to production levels.

Tupras, which operates four refineries with a combined capacity of 562,000 b/d, suspended production at its 220,000 b/d Izmir refinery on May 5, citing a fall in demand due to the pandemic, and restarted production on July 1, announcing a gradual ramp-up.

Trading sources on July 20 said Tupras had increased run rates at its Kirikkale refinery, having cut its crude buying in May. Tupras did not respond to a request for comment.

The refinery typically processes Kirkuk crude, which it receives via a pipeline from the Mediterranean port of Ceyhan.

Earlier, Tupras said it had revised its 2020 expectations, with refinery production falling to 24 million mt from 28 million mt and sales to 25 million mt from 29 million mt. It also forecast an 80%-85% utilization rate, from 95%-100% previously.

Azerbaijan's Socar said July 21 it had restarted production of small volumes of jet fuel at its 212,000 b/d STAR refinery, but said demand for the aircraft fuel was still very low and that it was not expecting demand to begin to approach normal levels before the fourth quarter.

The number of flights in and out of Turkish airports has been increasing as the restrictions have eased. However, the bulk of routes reopened are domestic, with the majority of international routes either not operating or operating at reduced schedules, and Turkish airports are believed to still be carrying high inventories of jet purchased before flights were suspended.

Socar previously said it had maintained production at STAR at normal levels by substituting increased production of diesel for jet fuel.

Turkish diesel production capacity typically meets only around 60% of normal demand.