South Africa's strategic geographic location makes it an ideal bunkering hub, and Linsen Nambi Bunker Services is capitalising on this advantage. The company owns and operates three purpose-built bunker tankers, designed for efficient delivery of bunker fuel at major South African ports, including Durban and Cape Town.“Our tankers can deliver over 70 000 metric tonnes of bunker fuel per month, with loading and discharge rates of 1 000 metric tonnes per hour,” said Gavin Naidoo, bunker business manager at Linsen Nambi. “They are equipped with Mass Flowmeters to ensure precise delivery, so customers always get exactly what they pay for.”These developments position South Africa as a critical player in the global bunkering market, reinforcing its role as a vital refuelling destination for ships. “The bunker tankers operating in the local market are world-class and comparable with any around the world. These assets and their capabilities should be leveraged for growth in the local bunkering sector. “At present, bunkering assets are underutilised and operating at around 20% utilisation,” said Naidoo.Volumes have plummetedBunker fuel volumes at South African ports have plummeted from 2.3 million tonnes per annum in 2008 to approximately 900 000 tonnes today, with a record low of under 600 000 tonnes recorded in 2023. However, the industry is beginning to show signs of recovery for several reasons, including the recommissioning of the Astron Energy refinery in mid-2023, the suspension of bunkering operations at Algoa Bay, and the recent closure of the Suez Canal.Despite these positive developments, the volumes remain significantly below expected levels. The current improvements are seen as a temporary reprieve rather than a full recovery for the South African bunker fuel industry.According to Naidoo, South Africa requires large-scale investment to revive the bunker fuel market. “Investment in refining capacity, storage capacity, terminal infrastructure, development of port infrastructure and equipment, and development of clean fuel energy for ships is all necessary,” he told Freight News. “South Africa and South African companies operating in the bunkering space must partner with international companies with the resources and appetite for investment in the local economy. The South African government must also recognise its role in ensuring resources are made available for industry reform and sustainability.”Numerous challengesHe said the bunkering industry faced numerous challenges. “There is a lack of refining capacity. At present, the Astron Energy refinery in Cape Town is the only refinery producing compliant forms of bunker fuel. SAPREF and Enref have shut down refining operations.” Enough usable land side storage capacity is another issue. “Traditional oil majors control the storage and related infrastructure, and thus control the market. Storage restrictions also severely impact the importation of bunker fuel and economies of scale. The result is uncompetitive pricing,” he said. “South African ports are among the most expensive to uplift bunker fuel stems. High bunker fuel prices hedge demand and limit the movement of bunker fuel within the various ports.”Lack of bunker berthsThe issue is further compounded by port congestion and the lack of bunker berths in the country. “To overcome the land side storage restrictions, the storage capacity at South African ports must be viewed from a national perspective, instead of port specific. For this approach to have tangible benefits for the industry, bunker tankers must have the ability to transit between ports with cargo aboard and provide bunker services at anchorage or within the breakwater of the respective port,” said Naidoo, who believes the value of the South African bunkering industry is not understood. “At its peak it was a $1.3-billion industry, purely on the sale and movement of bunker fuel volumes within South African ports. Consider its value to the entire South African maritime value chain and what could be achieved if this industry was harnessed and developed for the betterment of South Africans!”
