April 08, 2022by Riviera News
Data from consultancy Blue Insight indicates that shortages amounted to $250 million between the two ports in 2021
Data from Blue Insight indicated that many bunker fuel deliveries in Rotterdam and Fujairah are made below the financial breakeven point, indicating that fuel buyers are not receiving the bunker volume they pay for.
The consultancy said its findings will spark new calls for mass flow meters as a universal standard.
“Short bunker supplies cost buyers, owners and charterers approximately US$100 million in Fujairah and US$150 million in Rotterdam throughout 2021. These estimates are based on the economics of delivering fuel oil to very low sulfur fuel oil (VLSFO), but research supports similar loss patterns for high sulfur fuel oil (HSFO) and even greater losses for marine gas oil (MGO),” the Blue Insight report states.
The financial data used in the report is based on information provided by suppliers, buyers and active surveyors on these sites, supported by stress tests by the consultancy firm.
Short delivery, where suppliers deliver less product than appears on the bunker receipt, is not a new phenomenon in the bunkering industry. In 2017, Singapore, the world’s largest bunker port, mandated the use of mass flow meters to ensure accurate metering of delivered fuel.
Commenting on the results, Blue Insight Director Adrian Tolson said: “This challenge cannot be fully explained by volumetric shortages generated by suppliers, but we believe that the introduction of properly certified mass flow meters in combination with a Robust licensing process will do much to eliminate the issues. They removed short-term bunker deliveries from the supply picture and saved Singapore buyers an estimated $1.7 billion in fuel costs in less than four years.
Mr Tolson said that as carbon regulations tighten, initially through IMO EEXIs and CIIs, and carbon taxes and levies are introduced, delivery volume discrepancies of fuel are likely to have major compliance implications. Inaccurate and higher fuel delivery volumes will overestimate emissions and lead to higher penalties and operating costs for owners and operators.
“Having the right bunker regulations in place is key to managing fuel consumption and emissions. As the market evolves, it is important that port authorities, governments and customer measurement authorities help create an environment where greater control is exercised over the supply chain. It starts with getting the right technology mandated and backing it up with standards, regulations, and licensing. This includes the global introduction of mass flow meters in ports, or other appropriate measurement technologies for future fuels, and then a change of attitude so that the approach is the right one when fuels become more complex and more expensive” , said Mr. Tolson.
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