Sri Lankan Bunker Association Urges Open Bunkering at Hambantota

The Association of Licensed Bunker Operators of Sri Lanka (ALBOSL) Sunday was said to have urged the country's government to operate Hambantota port as a common user facility for bunkering, local media reports.

It is understood that ALBOSL is concerned that certain parties are trying to secure a single user deal for operation of storage tank farms at the port, something the association says harks back to the way the recently departed Rajapaksa government conducted business.

According to ALBOSL, a single user "monopoly" deal would be bad for bunkering in Sri Lanka, which it says should aim to develop towards becoming a regional hub.

But prices need to be competitive with the likes of Fujairah and Singapore in order to develop, said ALBOSL.

Currently storage capacity constraints mean Sri Lanka's 12 licensed bunkering firms can only take delivery of small quantities at a time pushing up unit costs and damaging price competitiveness.

"Operating Hambantota tanks storage as a common facility will enable ALBOSL members to utilise storage in both Colombo and Hambantota and import larger cargo parcels with better economics," said ALBOSL.

"This will lead to an overall improvement of bunker prices in Sri Lanka and facilitates capturing more bunkering businesses in and around Sri Lanka and increasing the foreign exchange income to the country."

According to the report, bunker sales volumes in Sri Lanka have remained at around the same levels for some years.

However, the Indian bunker industry has developed said ALBOSL and its ports now achieve prices much closer to those offered at Singapore and Fujairah.

"The monopoly will further lead to uncompetitive bunker prices and definitely hinder the growth of the bunkering and maritime industries in Sri Lanka as a whole," it said.

"We believe such a situation will be contrary to the Government's vision of developing the maritime industry and creating more employment opportunities."

In February, the Sri Lanka Ports Authority was said to be set to exit the bunker trade at Hambantota.