Back to the trenches at Richards Bay as bunker war looms

Feb 13, 2004
Author: P&S

After an extended stand-off over the cost of delivering bunker fuel and supplies to ships at the port of Richards Bay, one of the suppliers, Smit Dudula has thrown in the towel and will raise the price of delivery from USD3.00 to USD4.00 per tonne as from 1 March.

Over the course of the past three years, Smit Dudula has been able to absorb the continual increase in operating costs, says Dian Esterhuyse, Bunker Services Operations Manager for the company.

“However, the continued strength of the rand coupled with legislative requirements have placed us in such a position that, in order to continue supplying the port of Richards Bay with a world class 24-hour bunkering service, we have no alternative but to apply this increase.”

FFS Bunkers, which has operated a bunker barge at the port for many years told Ports & Ships it has no intention of adjusting its delivery price above USD3.00 per tonne and will adopt a wait and see approach.

Captain Phil Harris, general manager for FFS Bunkers said that when his company increased the price between 50 cents and one dollar a tonne last November it had lost ground and was forced to lower the price again.

“We’re not interested in matching Smit Dudula at this stage and will remain at USD3.00 a tonne.”

FFS Bunkers’ barge at Richards Bay, Livingstone, has a capacity of just on 1,000 tonnes for MFO and MGO. Smit Dudula’s barge of the same name has a combined capacity of 2,750 tonnes. Bunker fuel is also available by pipeline at the port but requires that ships move to the appropriate berth, which proves both costly and time consuming.

Prior to the arrival of Smit Dudula at Richards Bay the delivery price of bunker fuel was USD5 per tonne, which allowed for reasonable profit taking. With immediate effect Smit Dudula lowered the price, which was matched by FFS, leading to a stand-off in which it is unlikely that either company made any real profit.

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