Insatech: Bunker Fraud is Widespread and Costs Carriers Millions

Bunker suppliers can distort volumes during bunkering

Insatech A/S, which makes products to keep track of bunkering, says bunkering fraud is not only widespread and costs carriers millions, but the problem is getting worse.

"It happens a lot, at least in every other bunkering," Carsten Hounsgaard, project sales manager at Insatech A/S told ShippingWatch.

"If you ask most carriers, they'll tell you they expect to lose between four to five percent a year.

"If you convert that, we're looking at millions of dollars.

"Carriers simply can't afford to hand over 1-3 percent of their expenses."

Hounsgaard said Insatech has 50 to 60 installations of its Bunker System Installer, which logs bunkering transactions, in process, with demand growing when oil prices rise.

He said the industry does not have international rules in place to prevent fraud in refuelling.

"If you know just a little bit about the technical aspects it becomes easy to make a lot of money by cheating and defrauding, and the lack of rules encourages this development," he said.

"That's the biggest problem in the bunker trade."

Hounsgaard said buyers are most commonly cheated by suppliers who distort volumes by reducing temperatures or pumping air into the oil, while in other cases a supplier bribes a crew member to accept a delivery that is short of the amount promised.

Insatech's bunker control system measures mass rather than volume and keeps a record of the transaction.

The company said that it saved one ship nearly $32,000 when the crew was able to see the difference between mass and volume measurements.