Maritime industry expert seeks Customs dept ruling on RM220m K8 cargoes, calls for industry-wide SOP on petroleum blending

KUALA LUMPUR, September 22 — The Royal Malaysian Customs Department (JKDM) should provide a definitive written position regarding the Customs treatment of two petroleum cargoes with a combined declared value exceeding RM220 million, as ongoing uncertainty could impact various stakeholders in Malaysia's downstream petroleum sector.

Maritime Network Sdn Bhd CEO Datuk Seri R. Jeyenderan stated that the company is not seeking a favorable decision from JKDM but rather a clear explanation of the applicable law, procedure, and documentation requirements. The issue revolves around two Atlanta Crude Oil cargoes, totaling 76,954.325 metric tonnes, declared under the K8 procedure and discharged at Dialog Terminals Langsat in Johor.

Maritime Network has sought clarification since April, including meetings, formal correspondence, and a detailed report submitted in late August. The absence of a written response from JKDM, despite months of communication, creates regulatory uncertainty. MIDA's clarification on Sept 17 revealed that the cargo owner retains ownership of the crude oil, blending components, and the resulting Very Low Sulphur Fuel Oil (VLSFO), while Dialog undertakes blending and holds the necessary Manufacturing Licence.

JKDM's guidance should address whether the K8 procedure remains valid for crude oil blended into VLSFO under a different heading, the required declaration and duty treatment, and if any exemption or suspension applies. An industry-wide written guideline covering liquid petroleum cargo handled under K8, including blending, licensed-warehouse conditions, product identity, sampling, tariff classification, mass-balance records, and export duties, is also requested to ensure consistency and clarity across all Malaysian ports and terminals.