A Bahrain-based Gulf Petrochemical Industries Company (GPIC) has welcomed a European Union (EU) decision to suspend the customs duty levied on the import of methanol from Arabian Gulf states.

The 5.5 per cent levy on such imports from outside EU countries, implemented in January, was proving to be a 'significant financial burden' and had affected the competitiveness of GCC exporters in European markets, GPIC president Dr Abdulrahman Jawahery said in a report in the Gulf Daily News (GDN), our sister publication.

He said the move was the result of efforts of His Royal Highness the Premier's Adviser on Oil and Industrial Affairs and GPIC chairman Shaikh Isa bin Ali Al Khalifa, Industry and Commerce Minister Dr Hassan Fakhro and Finance Minister and Minister in charge of Oil and Gas Affairs Shaikh Ahmed bin Mohammed Al Khalifa.

“We also appreciate the efforts of the Foreign Ministry and Gulf Petrochemicals and Chemicals Association chairman and Saudi Basic Industries Corporation vice-chairman and chief executive Mohamed Al Mady,” Dr Jawahery said.

“The imposition of the new tax was a major challenge we were facing and it was affecting us negatively.”

The decision would have a positive effect on Arabian Gulf methanol exports to Europe, which would now return to their previous levels before the tax was imposed.

“This will also enhance our competitiveness in the Gulf countries' traditional European market,” Dr Jawahery added.

Europe imports the majority of its methanol needs from abroad and local industry stakeholders had also been lobbying that the duty would hurt manufacturing and lead to closures.

As of end last year, Europe, including the CIS countries and the Baltic, contributed 16.5 per cent of global methanol demand of 59.5 million tonnes, whereas the Arabian Gulf region had an 11pc share in the total global methanol production capacity of 98 million tonnes.

GPIC sold 440,846 tonnes of methanol last year. - TradeArabia News Service