According to an article published in Ship and Bunker news, following the January 1 introduction of a 0.50% sulfur cap on marine fuel, bunker buyers last month paid on average 66% more for fuel compared to a year ago.
VLSFO fuels expensive
IMO
To comply with the new rule the vast majority of vessels are now burning IMO 2020 grade
VLSFO fuels that are significantly more expensive than the previously ubiquitous 380 cSt HSFO bunkers they were lifting last year.
For January 2020 Ship & Bunker’s G04 VLSFO index averaged $619/mt and the G20 VLSFO index averaged $651/mt, which tracks the average bunker price across four and 20 leading global bunkering ports respectively.
VLSFO index
- This compared to IFO380 prices in January last year of $373/mt for the G04 IFO380 index and $392.5/mt for the G20 IFO380 index.
- The cost of VLSFO is also significantly higher than the current IFO380 pricing levels.
- Last month the G04 IFO380 index averaged $332/mt and the G20 IFO380 index $368.50/mt, putting last month’s premium for VLSFO over HSFO at $287/mt and $282.5/mt for the two indices respectively.
- This will presumably be welcome news for the owners of scrubber equipped tonnage who are, for example, last year said a $200/mt discount for HSFO vs VLSFO would translate
into annual savings of $100M+.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Ship&BunkerNews
