EMEA News
Rosneft Head Calls for Producer Control over Russian Bunker Market Development
Igor Sechin, president of Rosneft Oil Company has called on Russian Prime Minister Dmitry Medvedev to give bunker producers control over implementing bunker market development for the nation, Russian industry news site Information & Analytical Agency PortNews reports.
In a September letter, Sechin wrote that 70 percent of Russia's 8 to 9 million tonne-per-year bunkering market is accounted for by subdivisions of vertically integrated systems (VIS) companies such as RN-Bunker, LUKOIL-Bunker, and Gazpromneft Marine Bunker.
Independent bunker suppliers which buy fuel from small "teapot refineries" produce low-quality fuel and sell them through "shadow and offshore schemes, leading to considerable shortfall of taxes in the budget," Sechin wrote.
However, the Russian Association of Marine and River Bunker Suppliers (RosMorRechBunker), which is made up of 30 large bunkering companies including VICs, disputes some of Sechin's assertions, IAA PortNews reports in a separate story.
The Russian bunker industry depends on independent bunkering companies buying heavy fuel oil (HFO) from VICs, including Rosneft, and using them to produce various types of bunker fuel, the association said.
RosMorRechBunker added that mini-refineries, which supply no more than 2 percent of Russia's bunkers, charge more than large oil companies because its high content of diesel fractions, low density, straight-run, and viscosity characteristics make it more profitable to export.
The fuel from small refineries only appears on the bunkering market due to a lack of affordable, high quality fuel from VICs, the group said.
