SA pays 25% more for bunkers than FE, Europe

Alan Peat THE COST of bunker fuel for ships in SA is causing concern to some readers, who point out that our prices are up to 25% higher than those at main ports in Europe and the Far East. One comparison is that of 180cst heavy fuel oil (the only grade of bunker fuel refined in SA), which was rated at US$140.50 in Rotterdam and about US$176 in Durban last week. The Singapore price at the same time was about US$150. The reason for this disturbingly high disparity, according to Ian Grayston of Cockett Marine, is that SA's main heavy fuel oil (HFO) refinery in Durban owned by Shell and BP has been on maintenance shutdown for about the last month. The other Engen refinery, meantime, has only limited capacity for HFO, and is not capable of producing the volumes needed to overcome this shutdown shortage. Fuel prices, of course, said Grayston, are fixed on the supply/ demand balance. "During the shut-down period," he told FTW, "we've often been at a near stock-out position in SA and the local prices rise to match this low supply situation."