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Developments in the oil sector
Crude oil prices displayed a volatile trend during 2018. The yearly average level was USD 71 per barrel indicating 31% growth compared to 2017.

Fluctuation in crude oil prices together with the depreciation of the Turkish lira caused volatility in product prices. In May, the government started implementing a new tax regulation which ensured that pump prices were kept constant. Despite this support, a decline in the consumption of petroleum products was observed from August due to a loss of momentum in economic growth. According to data released by the Energy Market Regulatory Authority (EMRA), petroleum product consumption grew by 3.6% as of November 2018. Diesel had the biggest share in consumption and reached 23.1 million tons, marking an increase of 4%. Consumption of gasoline stood at 2.2 million tons with an increase of 2% while jet fuel consumption stood at 4.7 million tons, marking growth of 7.9% due to recovery in tourism.

2018 was a challenging year for the refining sector in terms of margins, with the Mediterranean refining margin declining to USD 4.6 per barrel from USD 5.3 per barrel in 2017 on the back of rising global capacity. Diesel and jet fuel margins were strong while the gasoline margin declined to its lowest levels in history.

Another important development this year was the waiver given to eight countries, including Turkey, regarding the US sanctions imposed against Iran as of November. In this context, Turkey, which completely ceased oil imports from Iran in November, will be able to continue importing oil from Iran within the terms of the waiver.

Developments in the LPG sector
Turkey is the 11th largest LPG market in the world and the 2nd largest in Europe. Turkey is also the 2nd largest autogas market in the world with the world’s largest fleet of LPG vehicles.

According to the November 2018 data released by EMRA, total LPG consumption increased by 2% and stood at 3.8 million tons. In the same period, autogas market increased by 6% to 3 million tons while cylinder gas market declined by 7% to 0.7 million tons.

As of the end of 2018, 22% of Turkey’s LPG demand was met by domestic production while the remainder was imported mainly from Algeria, the US and Norway.

Developments in the electricity sector
According to Turkish Electricity Transmission Corporation (TEİAŞ) data, in 2018 Turkey’s installed power generation capacity increased by 5% to 88,526 MW. In terms of composition, private sector has the highest share with 67% of installed capacity, 21% state-owned while the remaining 12% is based on the Build- Operate and the Build-Operate-Transfer schemes which sell their production to TETAŞ (Turkey Electricity Trading and Contracting Company).

Of the installed power generation capacity, 32% consists of hydroelectric power plants, 29% of natural gas power plants, 22% of coal power plants, 11% of other renewable and thermal power plants and 6% of solar power.

The Last Resource Procurement Tariff started to be implemented during the year and the Capacity Mechanism Regulation entered force. In addition, the decision was taken to merge TETAŞ (Turkish Electricity Trade and Contracting Corporation) with Elektrik Üretim A.Ş. (Electricity Generation Inc.).


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