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​Developments in the oil sector
The average oil price in 2017 trended 24% above the 2016 average level at USD 54 per barrel. Despite this increase, strong economic activity in Turkey paved the way for 7% annual growth in demand for oil products to 28.5 million tons, according to Energy Market Regulatory Authority (EMRA) data. Turkey is the 7th largest market in Europe for petroleum fuel products. In 2017, the growth was primarily driven by 8% increase in diesel demand which reached 24.2 million tons. Gasoline consumption increased by 3% to reach 2.3 million tons while demand for jet fuel also increased by around 3% thanks to recovery in tourism.

Developments in the refining sector in 2017 significantly supported margins in the sector. The combination of increasing demand for diesel and jet fuel in Asia and US as well as economic recovery in Europe supported middle distillate margins. Increased global trade volume and rising usage for electricity generation brought fuel oil margins to their highest levels in recent years. The favorable margin environment encouraged refineries to operate with higher capacity utilization. However, strong global demand, unplanned refinery stoppages and seasonal supply disruptions due to the hurricanes in the US pushed refinery margins higher throughout the year. Accordingly, the average Mediterranean refining margin stood at USD 5.34 per barrel, indicating an annual increase of USD 1.37 per barrel.

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.

LPG demand in 2017 was adversely impacted by 38% average increase in LPG prices and currency depreciation. According to EMRA’s 2017 report, total LPG consumption declined by 1% and stood at 4.1 million tons. In the same period, autogas market declined by 1% to 3.1 million tons while cylinder gas market declined by 1% to 0.8 million tons.

As of the end of 2017, 23% of Turkey’s LPG demand was met by domestic production while the remainder was imported mainly from Algeria, Norway and the US.

Developments in the electricity sector
In 2017, Turkey’s installed power generation capacity increased by 6% to 83,275 MW. In terms of composition, private sector has the highest share with 65% of installed capacity, 24% stateowned while the remaining 11% 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, 33% consists of hydroelectric power plants, 32% of natural gas power plants, 22% of coal power plants and 11% of other renewable and thermal power plants. The share of solar power in total capacity has risen to 2%.

The privatization of hydroelectric power plants and domestic coal fields held by EÜAŞ (state-owned Electricity Generation Company) continued throughout the year. EMRA’s 49 year license issuance for Turkey’s first nuclear power plant, Akkuyu was one of this year’s most important sectoral developments.