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Singapore bunker fuel sales volumes likely to drop with mass flow meter introduction

Singapore bunker fuel sales volumes likely to drop with mass flow meter introduction
Singapore bunker fuel sales volumes are likely to drop with the impending introduction of mass flow meters to measure the quantity of fuel delivered, industry speakers said at the International Bunker Industry Association forum held alongside the Asia Pacific Maritime 2014 exhibition Friday

Singapore bunker fuel sales volumes are likely to drop with the impending introduction of mass flow meters to measure the quantity of fuel delivered, industry speakers said at the International Bunker Industry Association forum held alongside the Asia Pacific Maritime 2014 exhibition Friday.

But market participants on the sidelines of the forum said while volumes may fall initially when the meters are introduced, some of that may then return to the port.


The forum included executive director of bunker company Piroj International Pte Ltd Simon Neo, DNVPS Singapore's COO of Asia, Middle East & Africa Rahul Choudhuri, Aegean Singapore's general manager Dennis Ho, and shipping industry veteran Captain Tey Yoh Huat who is also chairman of SSA Environmental sub-committee.

Suppliers anticipate that bunker fuel prices will rise in the initial stage, as they would want to cover the cost of buying and installing the meters, which costs around S$250-300,000 each ($196-235,000 each).

This may prompt potential buyers to seek cheaper prices in other ports, trade sources said.

Tey said the Singapore bunker fuel price was likely to remain the cheapest in the region even with the introduction of the meters.

There was agreement in the audience that supply and demand conditions and reliability would ultimately dictate where shipowners will buy their bunker fuel. In the region, Singapore has one of the most mature supply and delivery infrastructures, even if prices can sometimes be more competitive outside port limits.

Price differences inside and outside port limits can vary around $1-2/mt on average, trade sources said.

Mass flow meters, which measures the flow rate of bunker fuel through a pipe that helps it gauge the quantity and also the mass and density, have been a controversial issue in the industry.

Advocates say they will bring greater transparency and improve quality and quantity standards.

But others say the meters are no more accurate than the sounding tape measurement that is used currently. It takes a quantity reading from the barge fuel tank prior to transfer to the receiving vessel.

Neo, who is part of ongoing industry discussions with the Maritime and Port Authority of Singapore, said the meter readings would be considered "final and binding", in event of any quantity or quality dispute.

Some bunker fuel suppliers, who are already using the meters or about to do so on their barges, intend to charge a premium to buyers if they request deliveries using mass flow meters.

The current premium for the use of meters is around $2/mt on average, said trade sources.

Some speakers at the forum said there should be a balance between "man and machine," and how the surveyors' work will change remains to be seen, said Choudhuri.
Source: Platts

 

 

 
 
 
 
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