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The benchmark crude oil price followed a fluctuating path in 2019 and its yearly average came down by 9% versus 2018 to 64.3 USD/bbl. According to figures released by the Energy Market Regulatory Authority (EMRA), the decline in the consumption of petroleum products in Turkey, which began in August 2018, continued in the first half of 2019. With the recovery observed in the second half of the year, consumption of petroleum products increased by 2.2%. Accounted for the biggest share in consumption, consumption of diesel declined by 0.4% to 24.9 million tons. Consumption of gasoline increased by 3.2% compared to the previous year to reach 2.4 million tons. Jet fuel consumption, on the other hand, increased 6.5% to reach 5.3 million tons on the back of strong tourism sector.

With capacity increases in Asia and the Middle East, supply cuts in medium and heavy crude oil, the impending International Maritime Organization (IMO) 2020 measures for maritime fuels affecting demand in the last quarter, and with the effects of the sharp movements experienced in medium and heavy distillate products, margins remained below expectations in the refining industry during 2019. The Mediterranean refining margin, which had stood at USD 4.6/ barrel in 2018, declined to USD 1.7/barrel in 2019.

Other important developments during the year were the Star Refinery entering operation, price adjustments, especially the rapid increase in natural gas costs, and decision of the US administration in May 2019 to remove the exemptions which had been in place on the package of sanctions that it imposed against Iran.

Developments in the LPG sector
Turkey is the 10th largest L​​PG market in the world and the 2nd largest in Europe. Turkey became the world’s largest market for autogas, also having the world’s largest vehicle fleet and widest LPG and station network.

According to EMRA in 2019, LPG consumption stood at 4.2 million tons, 0.8% higher than it was in the same period of the previous year. The autogas market stood at 3.4 million tons, marking an increase of 2%, while cylinder gas market stood at 0.7 million tons, a contraction of 3%.

As of end of 2019, Turkey’s total LPG demand was split as 80% autogas, 18% cylinder gas and 2% bulk.

Developments in the electricity sector
According to Turkish Electricity Transmission Corporation (TEİAŞ) data, in 2019 Turkey’s installed power generation capacity increased by 3.1% to 91,267 MW. Private sector generation facilities operating in the free market comprised the lion’s share with 67.71% of this amount, of which public generation plants accounted for a 25.2% share, and unlicensed plants had a 6.9% share in the total. The share of generation plants operating with the BuildOperate and the Build-Operate-Transfer model decreased from 8.4% to 0.2%, as the contract period of some plants expired.

Of the installed power generation capacity, 31% consists of hydroelectric power plants, 28% of natural gas power plants, 22% of coal power plants, 12% of other renewable and thermal power plants and 7% of solar power.

The limit applied for the Final Source Supply Tariff was reduced to 7 million kWh in line with the decision taken at the end of 2019. There was no further extension given for lignite power plants working without a filter, which had previously been privatized and generation at these power plants, with a total installed capacity of 3,407 MW and which had contributed an average of 1,883 MWh to production, was stopped.

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