Muted Impact From India's Cabotage Law Change on Bunkering

by Ship & Bunker News Team
Tuesday June 19, 2018

A tax on bunker stems in Indian ports weighs heavily on sales in Indian ports despite the change in cabotage rules aimed a stimulating shipping and cargo throughput.

The impact of the relaxed cabotage rules has been tempered by the GST sales tax brought in last year, price reporting agency Platts reports citing traders' opinion.

Despite the tax being cut to 5% (from 18%), bunkering at Indian ports is $15-$20 per metric tonne (pmt) costlier compared with the pre-GST regime.

"Pre-GST, we were doing about 15,000-20,000 pmt a month," a bunker supplier was quoted by Platts as saying.

"Although the GST [on bunker fuel] has been cut to 5%, our [sales] volumes have fallen by over 20%."

According to bunker traders, reverting to the pre-GST regime would lend support to their business.