Drewry Plans To Launch BAF Based on LSFO

By
Mfame Team
-
1108

  • Drewry will launch the first Bunker Adjustment Factor (BAF) reference price based on low-sulphur fuel.
  • It will assist shipowners to cover the additional cost of the cleaner, low-sulphur fuel, as the sulphur cap is approaching.
  • Weighted average low-sulphur bunker price for major bunkering ports tracked by Drewry has been $542 per metric tonne.

According to an article published in Safety4Sea, in the first days of December Drewry will launch the first Bunker Adjustment Factor (BAF) reference price based on low-sulphur fuel.

Bunker Adjustment Factor

The BAF reference price is fixed to assist shipowners to cover the additional cost of the cleaner, low-sulphur fuel, as the sulphur cap is approaching.

Specifically, by the use of the BAF, the bunker reference price will change from the previous high-sulphur IFO 380 fuel to the new low-sulphur fuel and affect the new BAFs with effect from January.

Drewry proposes that shippers and forwarders use the average October-November low-sulphur price to set new BAF charges applicable from 1 January 2020.

Weighted average LSFO bunker price

In early October, the weighted average low-sulphur bunker price for major bunkering ports tracked by Drewry has been $542 per metric tonne. Assuming that prices won’t change their level in the next two weeks, the bunker reference price for the period October-November will be around $530-550, up about 34-38% from the $396 price of IFO 380 fuel at the same bunkering ports applicable to the 4Q19 period.

Moreover, many carriers have already announced transitional bunkering charges that will come into force from the 1st of December 2016. Also, Drewry partnered with the European Shippers’ Council for the launch of a bunker adjustment factor mechanism and bunker charge guide to help shippers monitor and control bunker charges.

Also, CMA CGM and Maersk announced the launch of a bunker adjustment factor in light of the approaching sulphur cap regulation.

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Source: Safety4Sea