Timothy Cosulich, ceo of Italian firm Fratelli Cosulich, told CNBC that the company welcomes the compulsory use of the mass flow meter technology which is aimed at clamping down on malpractices of fuel quantity shortchange.
“We were among the few companies who were pushing for an early implementation of these mass flow meters. There are suppliers who don't care about their reputation so they can afford to be unreliable yet aggressive on prices. That seriously damages the market and the reputation of Singapore in the bunker industry,” Cosulich was quoted saying.
The Maritime and Port Authority of Singapore (MPA) will implement the use of mass flow meters on bunker tankers operating in Singapore waters from 2017, making it the first port in the world to mandate the use of the technology for bunkering.
In bunker fuel trading, fuel is sold by mass but delivered by volume. The use of mass flow meters, which measures mass flow rate of a fluid, will allow the fuel quantity to be measured more accurately by mass rather than volume.
Cosulich said the new ruling will better regulate Singapore’s bunkering market and allow bunker players to compete on a more level playing field.
“I'm very happy to compete with reliable players: players who play by the rules and focus on quality. I hope those second-tier players will leave the market [with the mandatory requirement]… which will allow our margins to improve by maybe 10-20%,” he was reported saying.
“We're just making enough money to break even and I don't expect this to change for the next year or two. It's a very competitive market, considering there are about 60 suppliers at the moment in Singapore. The market is big, but it's definitely not big enough for 60 suppliers,” he said.
As at 5 August 2015, MPA listed a total of 59 accredited bunker suppliers that are licensed by the port authority to supply marine fuel in Singapore port. Among the 59 suppliers, around 80% of bunker fuel sales are concentrated in the hands of the top 10 suppliers, according to industry sources.
Singapore is currently the world’s largest bunkering port, selling 42.4m metric tonnes of bunker fuel in 2014.