Turkish parliamentary committee adopts draft liberalizing oil market

Nov 13, 2003 01:00 AM

The Turkish Parliamentary Industry and Trade Committee adopted a petroleum market draft designed to liberalize the oil market with a few changes. The draft unites refining, processing and transmission activities with distribution activities. Companies will require a license for refining, processing, storage, transmission, fuel oil distribution, transportation and setting up gas stations.
Energy Market Regulation Board will be able to impose exemption in transmission and processing activities in line with its principles and measures. The board will evaluate license demands and inform the concerned companies. License owners will be required to act in line with the commercial and technical legislations and take necessary measures to prevent environmental pollution.
Refinery license owners will also be able to process, store, transport oil to nearby plants by pipelines, as well as distributing oil by setting up a separate company. The committee enabled state oil refiner Tupras to set up a distribution company or become partner to other distribution companies, thus providing the refiner competition opportunity.
The government hopes that the passage of the draft can increase the value of Tupras, of which its 65.76 % stake will be privatised through block sale. The privatisation administration received bids for the flagship sell-off. It plans to complete the sell-off by the end of this year in order to meet this year's $ 4 bn privatisation target.

Oil distributors will be able to distribute oil to their own gas companies or transport oil to plants near the storage plants via pipelines. The sales to be made through distributors' own gas stations will not exceed 15 % of their share in the domestic market, while the distributor's market share will not surpass 45 % of the total domestic market.
The distance between gas stations became a discussion topic in the committee, which decided that two gas stations would be no closer than 2 km to each other within cities, while they will not be closer than 10 km to each other on intercity highways. The draft stipulates that oil prices will be determined within the free market conditions.
Accordingly, the domestic crude oil price will be set in line with the market price at the nearest crude oil delivery port or refinery. The draft encourages domestic crude production with an article that refineries will give priority to domestic crude oil and purchase at the minimum price offered by the crude oil producers.

Source: Turkish Daily News
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