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Lloyds List: Bunker alarm as Durban runs dry

Refineries shut and three quit spot market, writes Jamie Dale, Lloyds List
Published: May 30, 2007

DURBAN’S bunker market has been left dry with refinery shutdowns and all three local suppliers withdrawing from the spot market.

Shell, BP and Engen have stopped supplying the spot market as Durban prepares for the next round of refinery maintenance, with Engen due to shut down from June 4 to July 6.

The market has been aware of Engen’s intention to stop supplying ahead of its downtime, with the facility not expected to resume spot supply until mid-July.

But the withdrawal of the Sapref refinery, a Shell and BP joint venture, has come as more of a surprise that locals see as a move to stockpile ahead of Engen’s closure.

‘Sapref is basically stockpiling for June ready for the Engen shutdown to keep the market wet and for contracts, so there have been no avails for May,’ said South African agents GAC Bunker Fuels.

Reports have also suggested that the problem has been linked to a pipeline which joins the largest refinery in South Africa to a nearby storage facility.

With demand quite high in Durban at the moment, local brokers appear to be taking a more positive view regarding the refinery shutdowns that continue to cause problems every year.

‘Owners are somehow getting used to it,’ added GAC Bunker Fuels. ‘The perception is that South African bunkering is just unreliable at times.

‘The refineries need to shut down for maintenance or the problem would be a lot worse in the long run.’

Last year, participants in South Africa were not so positive after the Cape Town and Durban refineries shut simultaneously causing severe product shortages in the regional bunkering market.

One local operator said at the time that these problems were frustrating owners and local suppliers who had not been given sufficient notice, just one week, prior to the Caltex refinery shutdown in Cape Town.

Caltex was not due to shut for at least another month but the early closure over lapped with the Sapref shutdown.

‘That was a one-off thing last year,’ said GAC Bunker Fuels.

‘All the refineries needed to get the maintenance completed before new regulations came into force on January 1 this year.’

With no commitment from the refineries, local suppliers were left with the difficult task of rebuilding relationships with its clients and the reputation for the ports’ reliability.

The market is still being challenged following a series of disruptions already seen this year, with severe weather conditions closing the Durban and Richards Bay ports.

But of more concern for the port operations is the rise in price of fuel oil and the restrictions of gasoil supply caused by the April closure of the Caltex refinery that is still not back to full capacity.

‘There has been no gasoil for one and a half months from Chevron,’ said GAC Bunker Fuels. ‘We are not getting the volume that we are used to and prices have skyrocketed.’

The refinery, faced with problems since the restart, has focused its fuel production mainly towards the domestic rather than the marine fuels market, restricting the volumes made available to suppliers in Cape Town.

This has added to the problems affecting fuel oil supply and price in Cape Town, with the earliest supply date given as June 6-8 while no gasoil prices are being offered.

Fuel oil prices in Cape Town are trading at around $388-390 per metric tonne and in Richards Bay at $390. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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