IBIA Highlights ‘Loophole’ in Singapore MFM Bunker Supply Chain

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The International Bunker Industry Association (IBIA) is calling for a solution to what it labels as a “significant loophole” in Singapore’s bunker supply chain at the point of fuel custody transfer between the onshore oil terminals and bunker tankers, particularly after the mandatory use of mass flow meters (MFMs) for bunker fuel deliveries.

The Maritime and Port Authority of Singapore (MPA) has enforced the use of MPA-approved MFMs for all bunker fuel deliveries within Singapore port waters starting 1 January 2017, a move widely perceived as a bold step in promoting greater transparency and ensuring accurate delivered bunker volumes.

But an area of concern that affects suppliers and bunker craft operators has not been addressed, as it falls outside the MPA’s jurisdiction, leading to variations in delivery volumes between Singapore oil terminals and bunker tankers.

“Bunker tankers have to accept the delivery volume recorded by the terminals, and IBIA has been informed that MFM-equipped bunker tankers have experienced discrepancies which put bunker craft operators at a disadvantage,” IBIA stated.

The onshore oil terminals are currently not bounded by MPA regulations requiring the use of MPA-approved MFMs during the transfer of fuel to the bunker tankers, creating the inconsistency in the supply chain.

“IBIA would therefore support a solution which applied the respective MPA-approved MFM system bunker tanker figures for oil terminal loadings, and is now playing a role in closing what is regarded by many as a significant loophole in the bunker supply chain,” the London-based association said.

“A cross industry group including IBIA, SPRING Singapore, the Singapore Shipping Association (SSA) and the Singapore Chemical Industry Council is in dialogue with relevant bodies governing the Singapore terminals in an effort to resolve this issue. The MPA is also involved in these discussions,” it said.

“IBIA believes that … using approved MFMs to measure quantity being loaded onto bunker tankers as well as that delivered to ship would address that missing link in the supply chain integrity.”

Meanwhile, IBIA has also continued to support vigilance and firm action by the MPA to swiftly deal with suspected irregularities carried out by errant bunker players trying to abuse the MFM protocol.

MPA has just revoked the bunker craft operator licence of Singapore-based Panoil Petroleum due to its unauthorised alterations made to the piping fixtures of five of its bunker tankers that were equipped with MFMs.

These alterations had allowed bunker fuel measured by the MFM to be siphoned out, undermining the accuracy of the readings from the MFM system.

“IBIA is confident that MPA will continue to take appropriate measures to punish and discourage malpractices in this area so as to not harm Singapore’s hard fought reputation as one of the world’s leading and most reliable bunker ports,” IBIA said.

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Source: IBIA

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