OW Bunker calls for collaboration on low-sulfur bunkers
Ship owners and operators must work more closely with fuel suppliers to improve the supply of lower-sulfur fuel, according to Søren Christian Meyer, global sales director at marine fuel supplier OW Bunker (OW), Ship & Bunker reports.
The new requirements for use of 1 percent sulfur fuel in the North American Emissions Control Area (ECA) has caused an imbalance between supply and demand that has affected North American fuel prices, particularly on the West Coast, with the supplier saying the low-sulfur fuel premium is as much as $200 to $350 per metric tonne (pmt) over high-sulfur products.
"A large part of the issue is that refineries are not developing enough product as they don't have a clear understanding of the demand because shipowners and operators have not been prepared to state what supply they need," Meyer said.
Operators must consider suppliers' financial strength and liquidity so they can get the best possible credit terms and must use appropriate risk management strategies to handle costs.
Suppliers also need to work with their customers on the "complex process" of switching fuels, which can cause both operational and financial problems if done incorrectly.
"Unplanned vessel downtime is simply not an option while cost and operational efficiencies are a premium for charterers," said Meyer.
A recent report by the UK P&I Club found that some ships are having difficulty switching between low- and high-sulfur fuels.
OW Bunker said it has implemented a new global quality control standard to make sure the quality of its low-sulfur products is high.
The level of cat fines in US bunkers has risen as the industry has reduced sulfur levels to comply with the ECA rules, Det Norske Veritas Petroleum Services (DNVPS) recently found.