* 4.7 percent duty to take effect January 2014
* Joins Mideast, together supply one third of EU jet fuel
* Move could lead to rise in European airline costs
By Ron Bousso
LONDON, July 11 (Reuters) - The European Union will levy a
4.7 percent duty on jet fuel imports from India in addition to
cargoes from the Middle East, its two top suppliers, an EU
official said, increasing risks of price rises for European
The European Union said last month it would impose the duty
on imports from Gulf Cooperation Council (GCC) states starting
Jan. 1, 2014 after removing the group from the generalised
scheme of preferences (GSP), which offers trade advantages to
India has not been removed from the GSP, but the EU will
remove the waiver because its oil products have become
competitive in global markets.
"Once a country becomes competitive as an exporter of a
particular category of products, the tariff preference is not
essential any more," the EU official said on Thursday.
"This means that India will not benefit any more from the
duty-free access to the EU market for oil products as of January
2014. Oil products imported from India will fall under the
general tariff regime, which for jet fuel foresees a duty of 4.7
Jet fuel will be the main product affected by the move,
given that diesel shipments enjoy a blanket exemption from the
The duty could lead to an increase in European jet fuel
prices. European airlines have warned that the decision could
cut into the embattled industry's competitive edge.
"We strongly condemn this levy as it is another tax burden
imposed on airlines that have to face already so many regulatory
and economical challenges," the Association of European
Airlines, which represents 32 major airlines, said recently.
The levy "will further weaken the competitiveness of the
European airlines," it added.
Jet fuel is the largest component of airline operating costs
in Europe, representing almost 35 percent today compared with 25
percent a decade ago, the AEA said.
European demand for jet fuel amounted to 1.2 million barrels
per day (bpd) last year, of which one third was imported, most
of that from the Middle East, according to the International
Energy Agency (IEA) and traders.
India exported an average of 57,500 barrels per day (bpd) of
jet fuel per month to the EU in 2012, according to traders.
The third-largest exporter of jet fuel to Europe is South
Korea, which could benefit the most from the changes in the duty
system, according to traders.
(Reporting by Ron Bousso; editing by Jane Baird)