TURKEY DATA: Diesel demand over Aug 1-8 rises 6% on year

Istanbul — Turkish diesel demand over the first eight days of August rose by 6.05% year on year to 471.2 million liters, energy ministry data showed.

The increase is below the 7.5% reported in July and the 8.2% reported in June, but still a stark contrast to the fall of 27.7% in May, when travel restrictions imposed to combat the spread of the coronavirus were still in place.

Gasoline demand over the first eight days of August totaled 100.16 million liters, up 32.45% year on year, a sharper rise than the 24.5% reported in July and in contrast to declines of 2.1% in June and 32.4% in May.

Sales of both diesel and gasoline were affected by the Eid holiday which ran officially from July 31 through to Aug. 3.

Daily sales of diesel, which is used widely by commercial vehicles, slumped over the four days of the holiday but returned to normal levels on Aug. 4, reflecting the countrywide return to work.

By contrast, sales of gasoline spiked two days before the official start of the holiday, and having remained steady over the holiday, rose again the again the following weekend.

This is believed to reflect the fact that gasoline is used largely by high end passenger cars, whose owners were able to depart early for an extended holiday, using their own vehicles in preference to flying.

Passenger car use for long journeys across Turkey is believed to have increased since the pandemic, as Turks continue to avoid using domestic flights.

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, before the coronavirus had been expected to spread 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.

Data from Turkey's state pipeline operator Botas, which supplies Tupras' Kirikkale refinery, typically with Kirkuk crude via a pipeline from the Mediterranean port of Ceyhan, indicates that crude deliveries were reduced in May before rising again in June, suggesting the company had cut run rates in response to the reduced demand.

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.

The company is expected to release its second-quarter results on Aug. 12.

Azerbaijan's Socar said Aug. 5 that it expects to produce around 12,000 mt of jet fuel in August at its 212,000 b/d STAR refinery, having halted jet production and boosted diesel production after the pandemic caused the suspension of most domestic and international flights from Turkish airports.

Socar said the company is currently only producing jet in response to customer orders, as stocks at airports are still high.

The company said previously that it was not expecting demand for jet 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.

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