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Fuel Quality and Fuel Quantity errors:

The marine industry is constantly  expressing concern about fuel quality and fuel quantity problems yet until now very little has been done to address these problems.

It isn’t because nothing can be done, indeed, these are all problems solved decades ago for the custody transfer of hydrocarbons, but simply because any initiative to address the problems will require investment. In fact, the custody transfer methodology represents a good model for bunker fuels, if the investment can be justified.

Background:

Properly managed a fuel, when bunkered, will be in the amount invoiced and of the quality originally declared.

However, is is common to discover that between the fuel being sampled and analysed prior to bunkering and bunkering the fuel, that the fuel quality will have been compromised in some respect or other. There may also be errors in the amount reported to have been bunkered due to tank dipping related errors or density errors. Some of these problems are inadvertent and simply a consequence of the methods and equipment used and some will be deliberate frauds, frauds made more easy due to the lack of effective fuel management and instrumentation. For examples, visit the “Bad Bunkers” page.

Market Forces:Costs and Legislation

Much of the problem associated with bunker fuels; the disputes about both quality and quantity, reflect the existing fuel management practices which have evolved in a market dominated by cost.

Fuel is one of the single largest operating costs of a vessel. Indeed, some operators report fuel as between 60% and 80% of the operating costs.  Thus for many vessels the drive to obtain the cheapest fuel possible has created a situation where many suppliers necessarily invest very little in fuel management or in instrumentation which would add to the cost of the fuel.

It is hardly surprising that in so many cases the fuel quality and quantity is not as expected because of the lack of required or voluntary investment  nor that as a result, the opportunities exist not just for inadvertent compromises of the quality but also for fraudulent supply.

Thus, in recent years, because fuel costs have risen dramatically and freight rates have been poor, many operators have found profitability affected and attention has focused on quality and quantity issues.

However transient (i.e. until profitability returns) this concern might be in isolation, there is another factor to consider: environmental protection legislation and specifically, so far as fuel is concerned, MARPOL Annex VI  the fuel sulphur limits that impact on fuel management.

Financial Risk:

Legislation creates financial risks for both suppliers and vessels.

The financial penalties would appear to be limited to the possible fines that might be levied if a vessel is discovered to be using a fuel with excessive sulphur content. That risk depends on how often such a situation occurs and the probability of it being detected.

It is the responsibility of Port State Authorities to ensure that the risk of discovery is very high and because discovery depends on establishing”due cause” (see Integrity for Port State Authorities) the financial risks increase simply because the “due cause” risk is much higher than the risk of having a non-compliant fuel.

Risks:

Digital Viscometers and fuel management::

Under the influence of MARPOL it now becomes necessary to keep fuels from different batches segregated from each other and to maintain those fuels homogenous in storage. Fuel samples must be representative and fuel quality must be accurately reported not just during bunkering but also on board the vessel which must log not only the sulphur content but also the density of the fuels used.

The value of digital viscometers is that they not only can be used to validate the fuel certificate but they can also reveal a great deal bout the fuel condition, whether it is aerated, if it is homogenous, if it has been adulterated (and can provide some indication as to possible cause) and generally demonstrate to all concerned parties that the fuel has been properly managed and in so doing it can also help limit fraudulent practices.

The Integrity system also helps ensure value for money as well as avoiding the risks of de-bunkering, detention and prosecution.

For examples of how Integrity helps suppliers and vessels avoid risk and achieve value for money bunkering, please continue to the other INtegrity pages.