The bunkering industry, including Singapore, may face issues in the physical delivery and trading departments come 2020, forecasts the CEO and Board Member of international bunkering firm Fratelli Cosulich.
“From the barge supply one thing that is specific to Singapore is the mass flowmeter installed on barges also means that all the fuel, no matter which tanks are being used, goes through the same mass flowmeter,” Timothy Cosulich told delegates at the Singapore International Bunkering Conference and Exhibition (SIBCON) on Wednesday.
“And at the moment most of the fuels supplied in Singapore is either 380 or 500 cSt grades and since those two products are not so different that allows for barges to be operated in a very efficient way.
“Come 2020, there will be a lot more fuels and these fuels will not be compatible with each other and that will lead to a lower utilisation of barges and therefore leading to an increase in barging cost.”
An increased barging cost of between USD $4 to $5 is expected due to the above development, he believes.
Moving on, Cosulich notes 2020 will see increased adoption of more expensive marine fuels, such as marine gasoil or low sulphur fuel oil, to the shipping industry – which will impact the amount of credit a bunker trading firm is able to offer.
“That means for the same credit line we will be able to sell less fuel; so if we are selling less fuel, clients will have to buy the missing volumes from other traders. The result of that is we, as an industry, will be more exposed to our customers, shipowners and operators.
“This is ok as long as it is ok until someone stops paying, and then there is a problem.”
Photo credit: Fratelli Cosulich
Published: 4 October, 2018
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