Asia/Pacific News
Singapore Bunker Market Experiencing Credit Crunch
Singapore's bunker market is seeing a credit crunch in the wake of OW Bunker's fiery collapse and fraud allegations, reports Seatrade Global.
Ex-wharf fuel sellers and barging companies have reportedly been incredibly cautious, which has prompted suppliers to also cut credit to end users due to tighter cash flow.
“There will be a liquidity squeeze that will cause a ripple effect down the supply chain," said an unnamed source.
"There will be impact on smaller-scale local suppliers who have been dependent on the trading houses to provide financial support for their cargo purchases.”
Another source also said that barging companies are currently demanding cash-in-advance (CIA) or cash-on-delivery (COD), hoping to avoid companies who have been overly affected by OW Bunker and who may default on payments.
However, the source noted that "“Ex-wharf sellers who want letters of credit or guarantees also cannot hold back their bunker cargoes for too long at the terminals due to incoming fuel oil cargoes that they have to make space for.”
In the meantime, some companies have also been benefiting as they scoop up OW Bunker's former clients, while some fuel sellers have also taken advantage by hiking prices for those who need immediate fuel deliveries.
The Maritime and Port Authority of Singapore (MPA) also said earlier this week that OW Bunker's demise would have little impact on bunkering operations in the city-state's port.
