South African bunkering market

IBIA chief executive, Peter Hall, told delegates at the African Ports Evolution conference in Cape Town this week, that whilst more than double the number of vessels move around the Cape of Good Hope than transit the Straits of Gibraltar, the South African bunkering market is still declining.

Mr Hall said: “The country is strategically very well located to handle vessels servicing the predicted increase in South American to Asia dry bulk trades as well as Asia to South America container traffic. Increased bunkering would mean increased business for port operations firms, oil producers, barging companies as well as international bunker trading companies.”

Last year around 600 ships a day moved around South Africa, whilst the volume of bunkers sold in Durban hit a twenty year low with 1.1m tonnes traded in 2012, and this looks set to decline further.

Part of the problem IBIA says is down to the availability of South African fuel which has historically been termed as “feast or famine” because of limited fuel storage facilities and inconsistant refinery turnarounds.

IBIA says these refineries are also unable to produce the low sulphur, low carbon, 380cst fuel which ship operators require. Added to this is that port call and bunker costs are high, the supply of fuel from offshore barges is banned and there is little competition in the market.

The association has advised the country to open its bunker market to an open economy system, produce fuel in line with global carbon and sulphur restrictions, adjust its fuel pricing structure to be competitive against South American and Asian ports and create safe offshore refuelling areas.