Sri Lanka bunker vendors eye new port prospects

SRI LANKA's bunker companies want the government to open up ship fuel supplies to the private sector at the new Hambantota port on the south coast close to the main shipping route, according to Lanka Business Online.

Officials said the market for ship fuel can be expanded as hundreds of vessels daily sail past the Hambantota port which was opened in November.

The Sri Lanka Ports Authority (SLPA) has announced it plans to start bunkering operations at Hambantota in May and is buying four bunker barges.

The SLPA has said bunkering will not be opened to private suppliers in Hambantota as it wants to keep the business for itself to earn revenue on ship fuel sales to help repay loans taken from China to build the port.

But Sri Lankan bunker firms are lobbying for the business to be opened to the private sector, saying increased competition and efficiency will expand the market.

Sri Lanka Shipping, one of the eight licensed bunker suppliers in Colombo, has already submitted a proposal to the SLPA to sell ship fuel in Hambantota when it invited investments for industries in the new port.

"We submitted a proposal to supply bunkers under port services," said managing director Mohamed Reza. "We're waiting for a response."

Port operators usually do not get involved in supplying ship fuel which is left to the private sector in other ports, he said.

"People have to go in there and invest and start marketing and offer efficient services at competitive prices to build a market."

Bunker sales at Colombo port increased after a private sector monopoly was broken and more suppliers allowed, with prices also falling.

Lanka IOC, the local unit of Indian Oil Corp, is also eyeing bunkering business at Hambantota.

"We're keen to do bunkering at Hambantota," LIOC managing director K R Suresh Kumar said.

Mr Kumar said the SLPA can earn revenue by hiring bunker fuel storage tanks now under construction to the private sector which can do the marketing and selling.

"It is not necessary for the entire marketing of bunkers to be handled by the SLPA. By allowing more players the business can expand."

Irshad Mushin, director of maritime transportation of Hemas group which is expanding investments in shipping, said private bunker firms could use their global networks to attract ships to take bunkers at Hambantota.

"A proper strategic approach to bunkering needs suppliers who have global networks like bunkering in hubs like Singapore, Fujairah and Rotterdam," he said.

"They have long-term contracts with shipping lines with fleets of big vessels like bulk carriers and oil tankers which take on very large volumes of fuel."

Such an approach would help the port to capture a bigger market for ship fuel than attracting casual callers looking to top up on fuel at the closest port while passing the island.
(Source:www.schednet.com)