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

Malaysian maritime industry expert Datuk Seri R. Jeyenderan has asked the Royal Malaysian Customs Department (JKDM) to provide a clear written ruling on the customs treatment of two petroleum cargoes with a combined declared value exceeding RM220 million. The uncertainty surrounding the matter could impact shipping agents, terminal operators, cargo owners, and other participants in Malaysia's downstream petroleum sector.

Maritime Network Sdn Bhd CEO Datuk Seri R. Jeyenderan stated that the company is not seeking a decision in its favor but is requesting that JKDM clarify the applicable laws, procedures, and documentary requirements in writing. The issue concerns two Atlanta Crude Oil cargoes totaling 76,954.325 metric tonnes, which were declared under the K8 procedure and discharged at Dialog Terminals Langsat in Johor.

Jeyenderan has been pursuing clarification through various channels since April, but the lack of a written answer has created regulatory uncertainty. The Malaysian Investment Development Authority (MIDA) has provided some guidance, stating that the cargo owner retains ownership of the crude oil, blending components, and the resulting Very Low Sulphur Fuel Oil (VLSFO), while Dialog Terminals Langsat handles the blending and holds the relevant Manufacturing Licence.

MIDA advised that the client is a trading company and is not required to apply for a Manufacturing Licence for the blending activity. However, MIDA identified Customs as the authority for matters such as whether K8 remains valid for blending crude oil into VLSFO, the required declaration, and the applicable duties. Industry-wide written guidelines or operational standards covering liquid petroleum cargo handled under K8, including rules on blending, licensed-warehouse conditions, product identity, sampling, tariff classification, mass-balance records, and reconciling inbound cargo against final outgoing exports, were also requested by Maritime Network.

Jeyenderan emphasized the need for a written Customs position to create consistency, accountability, and equal opportunity for all qualified Malaysian industry players.