Short deliveries in the key bunker hub of Fujairah cost bunker buyers an estimated $100 million in 2021, a new report from marine analysts Blue Insight has claimed.
“These estimates are based on the delivery economics of very low sulphur fuel oil (VLSFO), but the research supports similar patterns of losses for high sulphur fuel oil (HSFO) and even greater losses for marine gas oil (MGO),” the company stated.
Blue Insight says its findings are based on significant inputs from suppliers, buyers and surveyors active in Fujairah, supported by stress testing from its in-house team and show evidence that buyers of fuel are not receiving the volume of bunkers they are being billed for. “This is largely due to intentional volumetric shortages as well as legacy operational and attitudinal practices in shipping and bunkering that need to evolve,” the company claims.
Blue Insight believes its conclusions should prompt renewed calls for the use of mass flow meters (MFMs) as a universal standard. It continues, “We do believe that the introduction of properly certified mass flow meters in combination with a robust licensing process will do much to eliminate the issues. To date, only Singapore has mandated the use of MFMs for bunker delivers and it is widely accepted to have been successful in eradicating short delivery malpractice – that is, where suppliers deliver less product than appears on the bunker receipt.”
While short delivery issues are nothing new, Blue Insight believes the problem will be exacerbated by industry efforts to decarbonise, and as new, more expensive fuels are introduced. The report concludes that, “Fuel delivery volume discrepancies are likely to have a major compliance implication, as inaccurate and higher fuel delivery volumes will overstate emissions and lead to penalties and higher operating costs for owners and operators.”