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CHEAP bunker
fuel in Malaysia has been blamed for the
recent drop in demand for marine fuel in
Singapore.
A
number of container shipping lines, which
are now reported to be spending up to 50
per cent of their vessel operating costs
on fuel, have opted to bypass Singapore
in favour of its northern neighbour when
purchasing bunker fuel.
"We
did experience a slight drop in volumes
all because prices of the fuel are cheaper
in Malaysia", a source close to the
Singapore Ship Owners Association (SSA)
confirmed to Hong Kong Shipping Gazette
in a recent interview...
According
to an earlier statement issued by the Maritime
Port Authority of Singapore on its website,
the Republic's sales of ship fuel or bunker
fuel fell to 3.38 million tons in January
from 3.63 million tons in December.
The
regulatory body has since removed the announcement
claiming that some of the information had
not taken into consideration other variables.
Still
the fall was enough to cause worries but
not anxiety as the city-state's much touted
better quality bunker fuel has always been
sought after by owners for fear of not hurting
ship engines or engine parts that feed on
it.
The
emphasis on quality that Singapore has always
maintained is what has given it an edge
over the rest of the world's bunkering ports.
Yet
most of the cheaper bunker retailed in the
neighbouring state of Johor where the giant
transshipment port of Tanjung Pelepas lies
and where a bunkering port on the island
of Tanjung Bin was once envisaged, cannot
be overlooked, particularly in today's high
cost environment.
Interestingly,
the drop in the bunker volume sales in Singapore
was also mentioned by the nation's Transport
Minister Lui Tuck Yew in a public address
to the shipping community as recently as
last year.
The
fall in bunker volumes for the world's largest
bunkering port adds a new dimension to how
ship operators have sought ways to arrest
the twin problems of falling freight rates
and the collapse in revenue and profits,
which has dogged the industry ever since
ships began rolling out in huge numbers
worsening an already overstretched, saturated
market of box ships.
Singapore
transacted some 42 million tones of bunker
fuel last year, making it the most sought
after jurisdiction for one of the shipping
industry's essential commodities.
Even
so, shipping officials in the city-state
have been quick to warn against the temptation
to jump to "hasty conclusions".
It
has traditionally been a given that whenever
bunker prices rise, ships begin to slow
steam; a deliberate act of cruising at speed
levels below the nominally accepted 25 knots.
Yet
there is little to deny the attraction of
cheaper fuel even if the quality does not
match that found in Singapore.
Prices
for IFO380 fell US$1.00 to $652.50 on February
20, according to reports from Ship and Bunker.
The
question of high priced marine fuel became
acutely distressing to ship owners when
oil prices began rising in reaction to the
standoff between the West and Iran over
the latter's nuclear program, which the
United States has claimed, among others,
to be a front for the development of nuclear
weapons.
Though
the quality of bunker in foreign jurisdictions
has sometimes come into question, Hong Kong
Shipping Gazette understands steep bunker
prices in the city-state have been a "challenge"
in these troubling times.
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