In International Shipping News 11/11/2016
Delegates at the International Bunker Industry Association’s annual convention in Gibraltar had a lengthy discussion of fraud in the bunker industry Thursday as Singapore prepares to mandate more accurate delivery measurement by mass flow meter (MFM) from the start of next year.
Singapore’s authorities will require suppliers to use the meters from the start of next year for fuel oil bunker operations. MFMs can help resolve disputes where suppliers are accused of defrauding customers by selling frothy fuel with air increasing its apparent volume — known as the cappuccino effect — because they accurately measure the volume of liquid delivered.
“This is one of the biggest issues in bunkers, that people get cheated,” Jens Maul Joergensen, director of Oldendorff Carriers’ bunker department, said. “We have some of these ports in Europe where supplier after supplier has been cheating, and the authorities don’t do anything about it.”
IBIA chairman Robin Meech said some estimates put the amount of money lost by the shipping industry to inaccurately measured bunkers at as much as $1.5 billion/year.
Deniz Eraydin, director of Turkish bunker supplier CYE Petrol, argued that there was nothing to stop individual suppliers installing the meters on their barges and taking business away from rivals with less accurate measurement systems. But Oldendorff’s Joergensen said most will not bother unless authorities make them mandatory.
Port authorities in Europe have not followed Singapore’s lead in making the use of MFMs in fuel delivery compulsory. Some argue that if an individual port unilaterally requires MFM use, it may raise bunker prices and drive demand away to a nearby competing port.
“Intuitively it seems like the right way to go, but it’s a question of timing,” Bob Sanguinetti, chief executive officer of the Gibraltar Port Authority, said. “I don’t feel we need to rush into it.”
Source: Platts
