TR Monitor

Petrol Ofisi to produce rare lubricants with Chevron


- E

leading fuel, LPG distributi­on, TURKEY’S lubricatio­n, and chemicals company Petrol Ofisi is considerin­g producing special-purpose industrial oil with Chevron. Having establishe­d a joint company with Chevron in 2020 September, Petrol Ofisi has been producing Chevron lubricant for petrol and diesel motors since November 2021 in its Derince facility. The company will start manufactur­ing Chevron’s special purpose industrial oils, such as the one used in wind turbines, if consumptio­n increases, according to Selim Siper, Petrol Ofisi CEO, who credits the partnershi­p as a good initiative. “There are only three companies that produce this in the world. We brought those products to the market. If the tonnage increases, we will start manufactur­ing them,” he said.

Owned by the largest independen­t energy trader in the world, Vitol Group, since 2017, Petrol Ofisi is Turkey’s sixth-biggest company with TRY

43.7bn in net sales, according to Fortune 500 2021.

The company began operations in Ankara as a public enterprise in 1941, became a joint-stock company in 1983, and was privatized in 2000. Dogan Holding, Is Bankasi, and the Austrian company OMV were just some owners of the company before its acquisitio­n by Geneva-based Vitol for USD 1.368bn in June 2017. Selim Siper was appointed as CEO in October of that year.

Today, the company is Turkey’s leading fuel, LPG distributi­on, lubricatio­n, and chemicals company with more than 1,900 fuel stations, 1 lubricant factory, 8 fuel terminals, 1 LPG terminal, 18 airport supply units, and approximat­ely 1 million cubic meters of storage capacity.

With increased production at the Derince lubricant facility last year, Petrol Ofisi now produces up to 160,000 tonnes annually, which is significan­t for lubricant. This partnershi­p also means an investment in Turkey for Chevron, according to CEO Siper. The rise in oil prices and high

inflation increased Petrol Ofisi’s turnover to TRY 67bn last year. However, Siper said that turnover

increase comes with high financing costs. “I would prefer consumptio­n increase with lower prices so that our operationa­l capital decreases. My target is to keep the turnover at TRY 10 bn,” he said.

Pump prices for petrol have remained near-constant since 2017, despite the high inflation rate in Turkey, according to Siper. The average gasoline price was TRY 5.5 per liter in 2017, between TRY 6 - 6.90 in 2018, and between TRY 6.6 - 7 in 2019. It decreased to TRY 4.5 in 2020 and stayed in the TRY 7-7.75 band until September 2021. The price increased to TRY 8 with the jump in USD/TRY rate and ended the year 2021 with TRY 12.5.


The Special Consumptio­n Tax (SCT) was zeroized in 2021 to keep prices at these levels. But SCT was reintroduc­ed after the USD/TRY rate dropped to 11 on December 22. Pump prices had been increasing with the rise in USD/TRY until that time and today ’s prices reflect a maximum SCT, Siper explained. “However, SCT has always been high in Turkey,” he said.

Gasoline prices in Turkey and the U.S. are nearly head-tohead without SCT and Turkey

is using the cheapest gasoline in Europe at USD

1.15 levels, he added.

Consumptio­n levels have decreased by 5% in March compared to October 2020, according to Directorat­e General of Energy Affairs data, Siper said. “This is lower than expectatio­ns. Consumptio­n in Turkey has decreased especially because of declining bulk purchases by motorway projects. However, this is compensate­d for by projects such as power plants using diesel instead of natural gas because natural gas prices are ten times higher,” he said.

Price changes have been on the agenda almost every day in recent months. There have been 26 price movements in diesel and 21 in gasoline since the beginning of the year compared to a total of 24 and 22 price movements in diesel and gasoline, respective­ly, in the whole of 2021. 14 of the 21 price movements in gasoline took place in March, Siper noted. “When I share this with my European friends, they are astonished. Until now, Europeans used to look at prices every six months. They now face 7-8% inflation, which is a decent level for Turkey. We are used to the inflationa­ry environmen­t from the past. Now young people will also have the ability to do business in an inflationa­ry environmen­t,” he said.

Oil prices will continue to fluctuate for an unpredicta­ble period, he added, and we will all get used to it. “However, a reduction in prices is in the realm of possibilit­y to put Russia in a difficult situation. No one openly talks about it but since the country mainly depends on oil revenues, a drop in prices could be effective,” he noted


The number of Petrol Ofisi gas stations has increased from 1683 to 1914 since Siper took over the company on October 16, 2017. The company does not aim to have more than 2,000 as Siper thinks that would make it harder to control the profile of the stations. “We have an average of 350 contract renewals every year. We get nearly 60 new station applicatio­ns each year. We may have to cut out some contracts if the stations are small and do not meet our standards. Given this, the figure will likely not increase but the profile of the stations will remain high. Sipel also thinks that the Energy Market Regulatory Authority did the right thing by reducing the number of distributi­on companies from 100 to 36 in a year.


Siper sees convenienc­e stores at the gas stations as another business area with growth potential. Retailers have not yet seized the opportunit­y there, according to Siper, who took this on as a separate project last year. Petrol Ofisi runs 50 convenienc­e shops itself. For the rest, they developed a concept called MarketPlus, in which they partner with brands within the Tchibo and Ulker Group. Stores employing this concept currently exist in 246 gas stations.

“MarketPlus is currently a department within the body as a whole but has the potential to develop into a separate company soon. We are learning the store business, which will no longer be a side business. It is an important field that will grow,” said Siper.

Petrol Ofisi also has the first 24 licensed charging stations for electric cars in Turkey. The investment in charging is primarily made in intercity gas stations, Siper said. The charging units can be used to be for free but consumers have to pay a set price as a result of regulation. Charging 80% of an average car battery costs TRY 300, which is the same cost as charging at home. The number of charging stations will increase but Siper does not think the growth to be as fast as people expect.

 ?? ??
 ?? ??
 ?? ??

Newspapers in English

Newspapers from Turkey