EMEA News
South African Bunker Industry "On the Verge of Collapse"
The International Bunker Industry Association (IBIA) said in an emailed statement Tuesday that South Africa has "enormous potential" for bunkering, but is on the on the verge of collapse and needs policy changes to realise it.
Peter Hall, IBIA's chief executive, told an audience at the African Ports Evolution conference Tuesday that the Durban bunkering market hit a twenty year low of 1.1 million tonnes traded in 2012 even though around 600 ships move around South Africa each day.
"It is time that that we all awoke to the enormous potential that is currently lying dormant in South African ports," he said.
"The annual gain of an additional 900 ships a year in Durban for example would contribute an estimated 2.4 trillion rand (USD 126m) a year to the South African economy, excluding the value of bunker sales."
IBIA is calling for South Africa to shift its bunker market to an open economy system, produce fuel conforming to global carbon and sulphur limits, adjust its prices to compete with South American and Asian ports, and create safe offshore refuelling areas.
Saying that the nation's bunkering industry is "on the verge of collapse," IBIA said South Africa should work with neighbouring countries on crude cargo purchasing and keep port tariffs competitive.
The organisation also said limited fuel storage facilities and inconstant refinery turnarounds have contributed to a volatile supply of bunkers in the nation.
"The country is strategically very well located to handle vessels servicing the predicted increase in South American to Asia dry bulk trades as well as Asia to South America container traffic," Hall said.
"Bunker vessels are just too low on South African ports' list of priorities."
The price of IFO 180 was $622.50 per metric tonne (pmt) in Durban Tuesday, compared with $614 pmt in Singapore, with the price spread narrowing significantly since June, according to Ship and Bunker data.
