Can Sri Lanka be a major bunker suppler to global shipping industry?

• Gac World, IOC and LMS to deliver key session at CIMC

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The bunkering industry provides the shipping industry with the fuel oil that the vessels consume. The quality of the fuel oil provided will ensure the safe operation of vessels.

The shipping industry became very energy and capital focused with the development of containerisation and usage of containers ships. In such an industry fuel could be considered one of the most critical costs where the fuel may be as high as 50% of the carriers cost. Bunker fuel started to be used in the shipping industry increasingly in the 1950s as it is the primary power source for the vessel engine. 

Ship bunkering is a key support service that a maritime hub can provide for the global shipping industry. Supply of ship bunker is a business based on high volatility and risk and depends on the world crude markets and trade routes. Colombo International Maritime conference will have a key session on this subject, under the theme ‘Can Sri Lanka be a major bunker supplier to global shipping industry?’

As 40-50% ship operating cost is based on bunkering, it means bunker cost will reflect on competitive freight rates for global trade, if ship operators can be provided with quality bunkering services at efficient competitive prices on the routes that they operate, both the ship operators and the service providers and the traders can immensely benefit.

In the case of Sri Lanka, at this moment it does not have advance petrochemical processing plants, but have to depend on purchasing bunker from major refineries from the region and store and distribute. The advantage the country has is its location in the maritime world. Situated in the middle of the world’s busiest east west shipping routes Sri Lanka can develop the industry in to a valuable industry that will have multiplier effects to the maritime economy.

If a ship can carry less bunker on a voyage it can accommodate more cargo, which means it can take in less bunker at turnaround ports and re fuel whilst on voyage at a strategic location. 

Sri Lanka is located at such strategic location in the Indian Ocean, and can provide bunkering and other services to thousand of ships plying along the south coast connecting east west global trade. This is where Hambantota Port is situated, and it can provide both inshore and off show bunkering and ship services as a profitable business. For this purpose the private sector should play a greater role and should be allowed to set up operations for distribution and market development. 

The Government can provide facilities and be a landlord for storage, port services, etc; it may also have JVs with international and local partners who are conversant with the industry norms for bunkering.

Colombo International Maritime Conference CIMC has invited GAC Bunker Fuels Global Director Nicholas Browne to be the keynote speaker, along with speakers from Indian Oil Corporation and Lanka Marine services from John Keells Holdings will discuss, global, regional trends and the opportunities for Sri Lanka in the bunker supply industry for the Indian subcontinent region.

Details of the Colombo International Maritime Conference can be found on www.cimc2015.com or on hotline 0773820703.