Shipping fuel cost soars 87% on high oil prices
Rising oil prices globally have increased shipping companies' fuel cost by about 87 per cent from a year ago, Malaysia's Business Times reported, quoting Malaysia Shipowners' Association (Masa).
High oil prices have increased marine bunker fuel cost by US$250 a tonne since January this year, surpassing the US$700 a tonne mark.
'When fuel cost represents as much as 50-60 per cent of total ship operating cost, such an increase cannot be taken lightly,' Masa offshore representative Zahar Mohd Hashim Zainuddin said during his presentation at a day-long seminar organised by the Maritime Institute of Malaysia (Mima).
The seminar on 'Rising oil price and its impact on the shipping industry: Staying afloat in a sea of challenge' was held here on Wednesday.
It is estimated that ships consume two billion barrels, or seven billion tonnes, of oil a year.
'If the oil price goes to the US$200-per-barrel level, the transport cost to ship a standard 20-foot container from Shanghai in China to the US, for example, could go up to US$15,000,' said Mr Zahar, who is also MISC Bhd's vice-president of offshore business.
In 2000, when oil was at US$20 a barrel, transport for a similar shipment cost US$3,000.
Mr Zahar said the oil price increase has been so rapid that even the bunker adjustment factor adopted by shipping companies has not helped ease their burden.
'There needs to be a more dynamic formulation to address the issue,' he said, proposing that some kind of critical bunker factor be taken into consideration.
High oil prices have increased marine bunker fuel cost by US$250 a tonne since January this year, surpassing the US$700 a tonne mark.
'When fuel cost represents as much as 50-60 per cent of total ship operating cost, such an increase cannot be taken lightly,' Masa offshore representative Zahar Mohd Hashim Zainuddin said during his presentation at a day-long seminar organised by the Maritime Institute of Malaysia (Mima).
The seminar on 'Rising oil price and its impact on the shipping industry: Staying afloat in a sea of challenge' was held here on Wednesday.
It is estimated that ships consume two billion barrels, or seven billion tonnes, of oil a year.
'If the oil price goes to the US$200-per-barrel level, the transport cost to ship a standard 20-foot container from Shanghai in China to the US, for example, could go up to US$15,000,' said Mr Zahar, who is also MISC Bhd's vice-president of offshore business.
In 2000, when oil was at US$20 a barrel, transport for a similar shipment cost US$3,000.
Mr Zahar said the oil price increase has been so rapid that even the bunker adjustment factor adopted by shipping companies has not helped ease their burden.
'There needs to be a more dynamic formulation to address the issue,' he said, proposing that some kind of critical bunker factor be taken into consideration.