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'UN sulphur fuel rule disproportionately hurts African shipping'

THE impoverished shipping sector of Africa will be hit disproportionally hard by the imposition of the United Nations costly very low sulphur fuel rule that takes effect January 1, according to Paris-based Africa Report

28 December 2019 - 05:48

THE impoverished shipping sector of Africa will be hit disproportionally hard by the imposition of the United Nations costly very low sulphur fuel rule that takes effect January 1, according to Paris-based Africa Report.

'The new rules will raise costs for everyone and Africa is no exception,' said Cameron Maritime Resources managing director Steve Cameron. 'The difference is that Africa's smaller ports mean smaller ships, without the economies of scale.'



That means that costs for bunkering are significantly higher in Africa than elsewhere.



Said Fordham Law School professor Lawrence Brennan, a retired US Navy captain: 'Beyond South Africa, it is improbable that refiners will do much to provide compliant low sulphur bunkers to ships,'



African bunker demand, he said, is modest, with Egypt, South Africa, West Africa, Mauritius, Algeria, and Mauritania the main markets. North and West African ports face significant competition from Las Palmas in the Canary Islands, Gibraltar and Algeciras in Spain, Brennan says. 'These ports offer more competitive prices and better service.'



Increased prices for low sulphur fuel will translate into higher fuel surcharges per shipping container. Hapag-Lloyd has estimated meeting the mandate will equate to US$80 to $100 more per TEU.



The Paris-based International Energy Agency (IEA) said the quantity of VLSFO produced globally will initially be limited to one million barrels per day, because of reduced availability of low sulphur blending materials.


WORLD SHIPPING

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