RM220m K8 cargo: Maritime Network seeks clarity, not left to verbal interpretations

Two petroleum cargoes, valued at over RM220 million, have created uncertainty within Malaysia's downstream petroleum sector. The Marine Network Sdn Bhd, representing two Atlanta Crude Oil cargoes totaling 76,954.325 metric tonnes, is seeking clarity from the Royal Malaysian Customs Department (JKDM) regarding the handling of these cargoes under the K8 procedure.

The company has requested that JKDM provide a written statement outlining the applicable law, procedure, and documentary requirements. So far, despite multiple attempts since April, the department has not issued a written response, causing avoidable regulatory uncertainty. MIDA has stated that the cargo owner retains ownership of the crude oil, blending components, and the resultant Very Low Sulphur Fuel Oil (VLSFO), while Dialog undertakes the blending and holds the relevant Manufacturing Licence.

MIDA has advised that clarification on duties and taxes should be obtained directly from JKDM, as those matters fall under Customs' purview. Maritime Network has emphasized the need for a written Customs position addressing whether the K8 procedure remains appropriate after blending, the required declaration, and the applicable duties and taxes.