Doubts over India's commitment to bunkering
Industry observers are doubtful India is close to becoming a major bunker player.
They say it is unclear if Indian authorities are willing to move quickly to create more special economic zones (SEZ) where bunker fuel can be supplied tax free.
This despite the Indian government's National Maritime Development Programme (NMDP) with its call to spend $14.75 billion over the next ten years upgrading infrastructure.
One of the projects that has been stalled is the proposal for a 1.5 million metric tonne (mt) capacity bunkering terminal in Cochin.
Industry players told Bunkerworld on Wednesday the Cochin project was an example of why they were skeptical of India's commitment to creating an internationally competitive bunker market.
They said it was still not clear what tax-status would be given to fuel sold to international shipping from Cochin.
Without tax exemptions, bunker prices in Indian ports will remain well above those in regional bunker centres.
Lloyd's List quoted Chemoil chief executive Robert Chandran as saying that India had a shortage of bunker storage space.
It also quoted Total Marine Fuels' general manager David Bleasdale as saying that a lot of India's bunker storage capacity was for 180 centistoke (cst) product and that heating devices would be needed to store 380 cst material.
“There needs to be more investment and barges need to be brought up to international standards,” Bleasdale said.
But investment could be difficult to encourage.
“One of the problems with a government that can change the tax rules is they can change them back again,” warned Bleasdale.
Antonio Cosulich, managing director of the bunker division of Fratelli Cosulich, added: “If bunkering volumes increase in India, this will most likely be absorbed by local Indian trade.”
“I don't see it as a bunker base like Singapore in the sense that ships will stop to take bunkers only in India.”
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| Red tape surrounding bunker sales tax compromising competitiveness |
This despite the Indian government's National Maritime Development Programme (NMDP) with its call to spend $14.75 billion over the next ten years upgrading infrastructure.
One of the projects that has been stalled is the proposal for a 1.5 million metric tonne (mt) capacity bunkering terminal in Cochin.
Industry players told Bunkerworld on Wednesday the Cochin project was an example of why they were skeptical of India's commitment to creating an internationally competitive bunker market.
They said it was still not clear what tax-status would be given to fuel sold to international shipping from Cochin.
Without tax exemptions, bunker prices in Indian ports will remain well above those in regional bunker centres.
Lloyd's List quoted Chemoil chief executive Robert Chandran as saying that India had a shortage of bunker storage space.
It also quoted Total Marine Fuels' general manager David Bleasdale as saying that a lot of India's bunker storage capacity was for 180 centistoke (cst) product and that heating devices would be needed to store 380 cst material.
“There needs to be more investment and barges need to be brought up to international standards,” Bleasdale said.
But investment could be difficult to encourage.
“One of the problems with a government that can change the tax rules is they can change them back again,” warned Bleasdale.
Antonio Cosulich, managing director of the bunker division of Fratelli Cosulich, added: “If bunkering volumes increase in India, this will most likely be absorbed by local Indian trade.”
“I don't see it as a bunker base like Singapore in the sense that ships will stop to take bunkers only in India.”
Cowan Thant Zin | Wed Aug 22 04:34 GMT 2007