TURKEY DATA: Diesel demand in first 29 days of August rises 4.81% on year

Istanbul — Turkish diesel demand over the first 29 days of August rose 4.81% year on year to 1.614 billion liters, energy ministry data showed.

The data shows a continued slowing of the increase in demand of recent months but is 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 29 days of August totaled 305.1 million litres, up 8.68% year on year, lower than the 9.5% reported over the first 22 days of the month and considerably below the 32.45% rise reported over the first eight days of August, but was still in sharp 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 this year ran officially from July 31 through to Aug. 3, and in 2019 ran from Aug. 11-14.

Sales of diesel, used widely by commercial vehicles, slumped during the holiday while sales of gasoline, which is mostly used by high-end passenger vehicles, rose, with the increase this year greater than normal due to the pandemic, with many Turks preferring to use their own vehicles to travel on holiday in preference to flying.

It is unclear whether the demand increases will continue at the same level.

Many Turks are still working from home, which should depress passenger car usage, but at the same time sales of new passenger cars and light commercial vehicles in August more than doubled year on year, with demand for secondhand vehicles also significantly higher than normal as Turks continue to avoid public transport.

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 hut, had been expected to expand 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 on July 1, announcing a gradual ramp-up.

Data from Turkey's state pipeline operator Botas, which supplies Tupras' Kirikkale refinery, shows reduced deliveries in May, suggesting the company may have also reduced run rates at that plant.

Tupras announced Aug. 12 that its total domestic sales for the second quarter totaled 4.1 million mt, down 25.5% year on year, with diesel sales down 14.8% at 2.3 million mt and gasoline sales 6.7% lower at 0.5 million mt.

The company repeated its earlier statement that 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 earlier this year halted jet production and boosted diesel output at its 212,000 b/d STAR refinery after the pandemic caused the suspension of most domestic and international flights from Turkish airports.

The company said this week that jet consumption is increasing in line with the number of flights operating and that STAR is continuing to produce in line with demand.

Socar said Aug. 5 that that it was at that time only producing jet in response to customer orders, as stocks at airports were still high and that it expected to produce around 12,000 mt of jet fuel in August.

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 still operating at reduced schedules.

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