Africa’s bunker industry cleans up

The bunker market in Africa
is evolving to offer better
quality of service in a more
regulated environment,
but potential for growth still faces
significant challenges.
This was the conclusion drawn
from a two-day International
Bunker Industry Association
(IBIA) regional forum held in
Cape Town recently.
According to IBIA, despite the
ongoing challenges, the industry
does offer some significant
opportunities for those willing to
invest in bunkering.
A major trend for bunkering
in Africa, said Jon Hughes,
managing director of South
Africa-based bunker trading
company SABT, was that illicit
activities and poor practices were
in decline and the industry was
becoming more regulated. With
law and order being imposed
across the region, the piracy threat
plaguing the West African bunker
market had also been significantly
reduced.
According to Hughes, this
increasing regulation has resulted
in tighter customs checks in
several markets,
along with
an increasing
trend toward
imposing
bunkering
licence
requirements
in individual
countries. He
suggested that
the latter had
tended to reduce the number of
suppliers in some areas, which
may now be better regulated, but
it had reduced competitiveness
and thereby restricted market
growth.
He said Pointe Noire was a case
in point where restrictive licensing
meant the anchorage was being
dominated by one player, while
in Angola a customs crackdown
appeared to have put an end
to sales of competitively priced
marine gas.
There is some optimism thanks
to higher
standards of
service across
Africa.
East Africa’s
bunker market,
however, is
still much
less developed
with limited
supply options,
infrastructure,
product offerings and higher
prices.
Bureaucracy and taxes leading
to high import costs continue to
be a challenge.
One exception in East Africa is
Port Louis in Mauritius, the forum
heard.
The government in Mauritius is
supporting investment in developing
its bunkering sector, turning its
island into a petroleum hub, and
the efforts are starting to pay
off. “The motto for the country’s
bunker industry is: We are not here
to survive, we’re here to thrive,”
Rajanah Dhaliah, CEO of the State
Trading Corporation (STC) in
Mauritius told the IBIA forum.
This was all supported by the
government’s policies both with
regards to licensing, encouraging
good practices and economic
incentives for ships to call for
bunkers, such as a 50% reduction
on port dues and anchorage fees,
Dhaliah explained.
Government expectations in
Mauritius are for sales of 1 million
metric tonnes (mt) annually, to cater
for some 30 000 vessels. Currently
only 30% of that target has been
achieved, which means there is
ample room for new operators to
join, the forum heard.
INSERT & CAPTION
Increasing regulation has
resulted in tighter customs
checks in several markets.
– Jon Hughes