Singaporean ruling on port limits draws mixed reactions
Singaporean ruling on port limits draws mixed reactions
SINGAPORE (Reuter): A move by Singapore to extends its port limits will help curb ship refueling in open seas, some oil traders said yesterday.
However, others said the action could well turn business away and hinder the island's lucrative bunkering business.
Industry sources said on Wednesday that Singapore extended its official port limits, partly to try to draw bunker trade back within port limits.
The sources said the Maritime and Port Authority of Singapore (MPA) brought new port limits on its southern and eastern seaboards came into operation July 11 and that shippers were informed on July 25.
"This will definitely help bunkering within the Singapore port limits," said a major bunker supplier.
"Those who are doing off-port-limits (OPL) bunkering will be forced to enter the port for bunkering. This is bringing back Singapore's image for credibility and quality," said the supplier.
Singapore authorities have no jurisdiction over the grey OPL market. Bunkering is not illegal off port limits, but it means there is greater risk on quality and quantity, shippers said.
MPA declined to elaborate on the new boundaries but a bunker trader said he estimated the widening of the port limit represented a three-mile southward extension of the port limits off the island's southeastern and eastern coast.
The port limit was extended by one mile south on the south western seaboard, the trader said.
The movement squeezes the open seas space between the port limits and the traffic separation zone -- the highway for shipping.
Singapore is one of the world's biggest bunkering ports and has encouraged ship owners to refuel in the port to ensure quality and quantity. But many buyers opt for the OPL market to avoid paying port dues as save on docking time.
Official data showed that Singapore's bunker sales totaled 16.9 million tons in 1996, a three percent drop from 1995.
But the volume of bunkering carried out in the OPL market doubled in 1996 to three million tons, industry sources estimated.
MPA's move followed news earlier in July that Indonesian authorities had boarded several tankers refueling outside Singapore port limits.
The Indonesian action has reduced OPL trade and industry sources said Singapore might have reached an understanding with Jakarta to cut back OPL trade.
"Then both countries will benefit, with more bunker sales and port dues," said a long-time market watcher.
However, some traders involved in the OPL trade cautioned whether the move would significantly help in-port bunkering.
"They've been trying hard to curb the OPL trade without much success in the past," one OPL trader said.
"Ship owners can always find cheaper bunker fuel elsewhere," he said, referring to cheaper port charges and bunker fuel prices elsewhere in Asia.
"We can always change the location. There should still be some area where we can do this," said one bunker supplier.
"Ship owners used to the OPL bunkering may just turn away to other countries. They think they are luring business into the Singapore port but actually they are pushing business away from Singapore," another OPL bunker supplier said.