As shipowners presume increase in prices of low-sulphur fuel towards the end of 2019 in preparation for the deadline set by the International Maritime Organisation (IMO) for sulphur cuts by January 1, 2020, negotiations for supplies have been sealed in good deals.
One of such ship -owning companies operating in Nigeria, Sea Transport, has concluded discussions with a refinery to ensure they do not get caught in the web of likely scarcity in the early periods of the low-sulphur enforcement.
“Talking of the sulphur content of marine fuel, we have discussed with some bunker suppliers, who supply our bunkers.
“We understand most of the refineries that are producing those high-sulphur fuel will stop it before the 2020, and that there would not be high-sulphur fuel in the market by the end of 2019,” Aminu Umar, the MD/CEO of Sea Transport, said in an interview in Lagos.
Umar said there was nothing to worry about as the change in marine fuel type would not not affect the shipping asset as ship, but for likely bunker price increase because of the call for the low-sulphur fuel.
His words: “Internationally, we look forward to seeing increase in bunker price because when the refineries are going to change there may be some scarcity of low-sulphur fuel in the market, and there is likelihood that the few refineries producing it would increase their price. But we believe it will thereafter stabilise.
He noted that enforcement had already started in some parts of the world, and ships comply.
“Today, some countries are already applying that, particularly in Europe. Your vessel cannot be allowed into Europe if you don’t have a low-sulphur fuel and high-sulphur fuel,” Umar said, adding that “Then, the moment you are certain miles away from Europe, you change to the low-sulphur
Menwhile, earlier in February this year, Poten and Partners had projected in a report that “the demand for the so-called sweet crude oil will increase as IMO sulphur cap 2020 will force the majority of the shipping industry to switch to low sulphur bunker fuels — with less than 0.5% sulphur.”