Transport minister seeks to overtake Singapore as bunkering hub

Transport Minister Anthony Loke arrives at the Kuala Lumpur Convention Centre to launch the World Maritime Week 2019 National Celebrations, September 10, 2019. — Picture by Ahmad Zamzahuri
Transport Minister Anthony Loke arrives at the Kuala Lumpur Convention Centre to launch the World Maritime Week 2019 National Celebrations, September 10, 2019. — Picture by Ahmad Zamzahuri

KUALA LUMPUR, Sept 10 — The Transport Ministry is in the process of reviewing regulations and restrictions to allow Malaysia to become a bunker hub for vessels passing through the busy Straits of Malacca, an industry currently dominated by southern neighbours Singapore.

Its minister Anthony Loke today said the move to expand and develop the needed infrastructure and ecosystems would allow the country to tap into its profitability, but admitted the current shortcomings in terms of security, supplies, and current regulations.

“Over the years we think we have lost out in terms of bunkering, because all ships coming to ports and passing by the Straits of Malacca, they need to refuel, but most of the time all these bunkering is happening in Singapore, so we are losing out in terms of business to our southern neighbour.

“We need to develop a whole ecosystem in terms of supplies, regulations, and enforcement, and we have to give confidence to the shipping lines that bunkering in Malaysia is safe and that we can be transparent,” he told reporters after launching the World Maritime Week 2019 National Celebrations at the KL Convention Centre here.

According to news reports, the bunkering services industry in Singapore was valued at RM2 billion in 2017 but Malaysia’s market size is estimated to be at least three times that of the little red dot and worth about RM6 billion.

Loke admitted there were shortcomings of the current bunkering facilities in Malaysia.

However, he said talks between his ministry and the Ministry of Domestic Trade and Consumer Affairs has started, with a review of the current regulations being the first issue on their agenda.

“We are reviewing all of these regulations and we are hoping to streamline it, and hopefully once we streamline that, the whole industry can be developed,” Loke said.

He said one of the main hurdles hindering the local bunkering industry is red tape.

“Talks are ongoing and it is not that we don’t have bunkering [facilities], we do; but I think we are not big enough and there is a lot of room for improvement, a lot of potential we can tap into because yearly there are so many ships passing by the Straits of Malacca and all that is a business opportunity for Malaysia.

“We already had our initial meetings at the official level between the Ministry of Transport and with the Domestic Trade Ministry, and of course that will lay the foundation.

“I will have a meeting with the minister himself to finalise the details and come up with comprehensive policies on how to move our bunkering industry forward,” he added.

Loke added one of the steps already taken by the ministry to aid in the development of the bunkering industry was Malaysia’s commitment to implement the Sulphur 2020 regulations, a global rule that sets a 0.5 per cent limit for sulphuric content allowed in fuel oil used on board ships.

The regulation, he said, will come into effect from January 1, 2020.

“This will significantly reduce the amount of sulphur oxide emanating from ships and should have major health and environmental benefits for the world, Malaysia in particular, as we are a maritime nation with several global renowned ports and a thriving maritime business,” he said.

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