India’s Second Bunkering Conference shows the way forward besides setting guidelines for the formation of the Bunker’s Trade Association
The entire spectrum of players in the bunkering business was present in full force at the HINODE’s 2nd Annual Conference on Outlook for bunkering and Marine Lubricants in India. The refiners, intermediates including traders, barge operators, shippers, insurers, surveyors, representatives of the classification societies, et al. Topics for the presentation no doubt were simple and almost stereotype like in most international conferences. But unlike other events where stress is laid on networking and speakers’ presentations, this one became a forum where participants sought to resolve issues, seek to redress difficulties, search for the right approach in case of disputes and set things in right perspective.
Considering that those who are into bunkering have been getting a raw deal it was therefore felt that it was time take the bull by the horns. A positive outcome was to form a trade association for the benefit all those who are in the bunkering business by taking up issues with the authorities and other agencies for getting them redressed.
As the price of fuel keeps soaring, the quality of bunker continues to be a source of concern to ship owners and charterers. The demand for low sulphur fuel has resulted in heavy blending and the use of inappropriate blend components. Engine damage and resultant lost time caused by bunker quality problems occur. Damage caused to ship’s engines from poor quality bunkers can be very costly, not only in terms of repair costs, but also de-bunkering costs and the loss of time incurred in dealing with the problem. Claims arising from these problems are in general complicated and they are often frustrated by lack of evidence, including representative samples, storage and consumption documentation and fuel analysis reports.
With these issues in mind the deliberations of the conference focused on three areas. The first was ‘Bunker quality and standards and credit management’ second being on ‘Outlook for Marine Lubricants’ and the third was on ‘Resolving Bunkering disputes’.
When purchasing bunkers it is important that the correct grade is specified and that the sale and purchase agreement includes the appropriate description of the fuel to be supplied. Josephine Goh, Area Sales Manager of DNV Petroleum Services Pte Ltd., Singapore advised that this is best done by reference to the International Standard ISO 8217 and identification of the required grade within this standard e.g. ISO 8217:2010 - RMG 380.
Generally all bunker business is on credit. According to Richard D’Souza, Vice President, Matrix Bharat Pte Ltd., contended that proper management system should be able to mitigate the risks. He showed the way to making analysis of credit risks. He said, “Trade credit insurance policy which improves rating also takes care of all transaction and risk of late payment, fixing a limit to the level of credit. “
Capt Virendra N Mishra, Country Head India of International Bunkering Middle East DMCC spoke extensively about the significance of some important parameters. A significant aspect was measuring residual fuel oil as this helps to determine the potential for causing serious corrosion to ship engines and on-board fuel storage systems, problems which can lead to costly repairs and ship engine breakdowns.
Refinery capacity in India exceeds demand pointed out Ashish Khanna, Sr Manager Marine Sales, Hindustan Petroleum Corporation Ltd. He gave an overview of the industry and the future trends. He said “There will be more of distillates fuels that will be used than the residual fuel.”
In the session on ‘Outlook on Marine Lubricants’ Rajesh Nambiar, Chief Manager of Technical Services, Indian Oil Corporation Ltd featured the Characteristics, Types and Applications of Marine Lubricants. Kirk D’Cruz, Founder of Marine Mindz described the Current Trends in Marine Lubricants Usage.
The final session stole the greatest interest from the participants as it showcased two major topics: ‘Resolving Bunkering disputes’ was handled resourcefully by Dilip Mody, Managing Director of Global Fuels and Lubrications Inc and the Volatile price and Quantity / Quality disputes was explained explicitly by C.K. Muralidharan, Assistant Vice President, Viswalab Singapore Pte Ltd. The former topic highlighted the four types of disputes concerning Quality, Quantity, Time and for Non-performance. Muralidharan on the other hand revealed the host of corrupt, unfair and unethical practices prevailing in the bunkering trade since there are no checks and balances in place and law in place and no regulatory body.
At the end of the day it was felt that there exits the need of proper regulation with some controlling authority being put in place so that ship owners get a better deal and the disputes resolved satisfactorily