Uncertainty over fuel compatibility “keeping marine engineers awake at night”, says S&P Global Platts

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Enforcement of IMO-2020 will commence within just a few months however most of the refiners are not yet ready to supply compliant fuels while the flow of information around the results of the ongoing tests in regards with fuel quality and fuel compatibility is almost zero. As a result of such a lack of transparency, marine engineers are extremely worried about the risks for engine damages, a recent report published by S&P Global Platts says.

According to the report “Into the Storm”, trouble may arise when low sulfur fuels are mixed and some blends prove to be incompatible with one another. For example, in case a more aromatic 0.5% sulfur fuel comes into contact with a more paraffinic blend, sludge may be formed which can subsequently block the filters.

Therefore, the risk for several engine failures across the world in 2020 is keeping marine engineers awake at night and the bunker industry has to address how it will deal with “an unfamiliar set of new fuels” the report adds. Noone in the industry wants to see a crisis with contaminated bunkers like the one which occurred during 2018 and the majority of shipowners who will not fit their vessels with scrubbers are remaining anxious in this regards.

It is not only the quality issue though but the uncertainty over pricing remains a pain too, the lead author of the report for freight markets, Alex Younevitch, said. Despite the fact that the additional fuel cost is expected to be passed on to charterers with a surcharge on the freight, the reality may be more complicated. This is because each shipping company may use its own differential, while some of them may load the cargo in vessels equipped with scrubbers, where the economics are different. All this will create a mess in the market, the report adds.

According to Mr. Youvenitch, the bunker cost recovery mechanisms seem to still be imperfect with several flaws that the recent volatility in fuel oil prices brought forward. If stakeholders do not deal with such flaws within time, they could turn the clouds of uncertainty “into a dangerous storm for the shipping industry,” Youvenitch concludes.

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