November 25, 2020

Bunkering, Sure Way of Revamping Shipping Sector

Andrew Mwangura Image: (Courtesy)

BY ANDREW MWANGURA

Bunkering sector can become an economic pillar for Kenya if the Port of Mombasa establishes itself as the Transhipment and Bunkering hub in Africa and the Indian Ocean.

The country is strategically located to handle vessels servicing the growing South America-to-Asia dry bulk trades as well as Asia-to-South America container traffic cargo.

Increased bunkering would mean increased business for the port operation firms, oil producers, barging companies as well as international bunker trading companies.

We have one of the best business friendly environments in Africa and the potential to become a major player in the Western Indian region shipping business network.

OPTIMUM USE

The government should make optimum use of its strategic location on the East-West shipping in the Indian Ocean, linking Asia and Africa and should aim for a leading role on this shipping route.

The business friendly environment also provides another opportunity to position the country as a major operator in this maritime sector.

Strategising the port as petroleum and bunkering hub will substantially increase its storage capacity for petroleum and other oil products.

But this will call for the government to safeguard the environment and ensure the bunkering project is environment friendly as a matter of priority.

Apart from this, the government will have to set up a new framework with the aim at facilitating business in the bunkering sector for all stakeholders of the vibrant blue economy.

Bunkering is the supplying of fuel for use by ships, and includes the shipboard logistics of loading fuel and distributing it among available bunker tanks. Image: (Courtesy)

Through the creation of incentives such as liberalizing the importation of bunker fuels so that private operators can import these products on their own; exempt bunker fuels from Excise Duty and Value Added Tax; remove Levy on importation, and create rebates on port anchorage dues, pilotage and tug service.

ANCILLARY SERVICES

Also the government should allow vessels that visit the port for bunkering purposes to carry out other ancillary activities such as crew changing, fresh water supply and ship chandelier.

This initiative will allow the oil majors and several international companies to develop bunkering activities in the facility.

This business has the potential to provide bunker fuel (fuel/gas oil) to ships to power their engines and supply fuel barges to ships anchored inside/outside the port or by pipelines for vessels berthed at quays.

The Indian Ocean is one of the busiest sea-routes in the world and at any given moment it is bustling with maritime traffic estimated at some 50,000 vessels each year with less than 10 per cent of this calling at Port of Mombasa.

The government and Kenya Ports Authority (KPA) can tap into this business circuit and increase its facility’s ship traffic by bunkering services to be carried out throughout the year by local suppliers such as Alfoss Energy Limited, Fossil Fuels Ltd, ALBA Petroleum Limited and SECO Company.

Containers being offloaded at the Kenya Ports Authority. Image: (Courtesy)

In order to further develop the bunker trade at the port, KPA has to allocate land in the port area to private promoters for the construction of additional storage facilities which will increase the storage capacity ashore from its current levels of storage capacities.

These facilities will position Port of Mombasa as a petroleum hub for the region and as an ideal location to supply bunker to passing vessels en route to the Asian markets.

Ends

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