Which brings us to the fuel that is supposed to get hit the hardest -- the HSFO
that is to be cast aside as IMO 2020 arrives.
Singapore fuel oil inventories STKRS-SIN have mostly fallen since May as suppliers clear stocks of HSFO
ahead of a shift to lower-sulphur grades under global ship fuel rules due to take effect next year.
"We expect freight rates to increase due to IMO implementation as the majority of shippers will have to switch from using cheaper HSFO
to a lower sulfur more expensive fuel source," says Steward, adding, "Those deciding to utilise scrubbing technology will have to swallow the upfront CAPEX installation cost."
Now, in a recent meeting, the committee recommended that all government strategic cargo including motor gasoline, HSFO
, high-speed diesel, LPG and crude oil should be imported on fob basis by government organisations, shipped through PNSC-owned or chartered vessels, and freight should be paid in Pakistani rupees.
* Installing exhaust gas cleaning systems (scrubbers), which allows operation on regular high sulphur fuel oil (HSFO
It was reported that there was a crisis relating to non-utilisation of HSFO
in October last year that led to almost closure of local refineries which annually produce about three million tonnes of HSFO
In 2017, demand for fuel oil averaged 7.5 million barrels per day (mb/d) of which 3.5mb/d was HSFO
, used mainly in bunkering.
This leads to the forecast of price differences between LSFO and HSFO
. The consensus forecast is the sulphur penalty at times will be high, as the mix of SA crude sales has become lighter with lower sulphur.
is weightier than LSFO in terms of the sulphur content in motor fuels (gasoline) and heavy diesel (HSFO
) in industrial fuels.
The fact of the matter is that High Sulphur Furnace Oil (HSFO
) does not need any processing before it is dispatched for consumption at a power plant.
Middle East 180cst and 380cst high-sulfur fuel oil (HSFO
) will be available to trade through DME from 16 May 2016.
KUFPEC has a topping plant on Seram island which can turn 18,000 b/d of crude oil into naphtha and HSFO