Bunker industry going distillate

Rising crude oil prices and tighter environmental regulations are moving the shipping industry into an era of ever higher bunker prices, the Sustainable Shipping Forum in Singapore has been told. Robin Meech, Managing Director of Marine & Energy Consulting Ltd, made the predictions in his opening chairman’s remarks on Thursday. He said the latest proposals from the IMO?s Marine Environment Protection Committee (MEPC) for reducing the sulphur content in marine fuel meant that within 15 years the shipping industry might be working in “an all distillate world”.

“Environmental regulations will impact all of us in terms of the way we operate our vessels, the greater range of fuels that will need to be supplied and in the adoption of emerging technologies.” He predicted that higher bunker prices were inevitable.

He said the increase in costs, coming against a background of a global ‘credit crunch’ and expectations that some freight rates might be about to peak, was likely to lead to consolidation by both shipping owners and suppliers. In the meantime, he said, higher bunker fuel costs were triggering an acceleration in the search for fuel efficiency and tighter environmental regulations were boosting the development of abatement technology.

“Both will result in pressure for investment by owners at a time when their income streams may well be drying up,” said Meech.