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The International Bunker Industry Association (IBIA) said on Tuesday that it is involved in talks with various industry bodies in a bid to resolve what it refers to as a "significant loophole in the bunker supply chain".

The association highlighted the potential for variations in delivery volumes between Singapore oil terminals and bunker tankers - an area of concern that affects suppliers and bunker craft operators, but which falls outside the MPA's jurisdiction.

IBIA noted that "bunker tankers have to accept the delivery volume recorded by the terminals", and that it has been informed that mass flow meter (MFM)-equipped bunker tankers have recorded discrepancies which put bunker craft operators at a disadvantage.

As a solution, IBIA suggests that the use of approved MFMs to measure volumes being loaded onto bunker tankers from terminals would "address a missing link in supply chain integrity".

IBIA is therefore supporting a solution which would apply the respective MPA-approved MFM system bunker tanker readings for oil terminal loadings.

A cross-industry group, including IBIA, SPRING Singapore, the Singapore Shipping Association and the Singapore Chemical Industry Council is said to be in dialogue with relevant bodies governing the Singapore terminals in an effort to resolve the issue.

Supporting efforts to protect MFM integrity

IBIA also stressed that it believes the benefits achieved from adopting the mandatory use of MFMs for marine fuel oil deliveries in Singapore must be protected by effective enforcement.

The Singapore regulation that came into effect on January 1, 2017, was widely perceived to be a significant step forward in promoting greater transparency and ensuring the accuracy of delivered tonnage in the port, but, as today's cancellation of Panoil Petroleum's bunker craft operator licence highlights, it has not come without difficulties.

In March, the harbour craft licences of five bunker tankers operated by Panoil were temporarily suspended while authorities investigated irregularities found on their piping fixtures.

Today, the Maritime and Port Authority of Singapore (MPA) confirmed that it has revoked the bunker craft operator licence of Panoil after checks revealed that there had been unauthorised alterations made on the pipelines of the bunker tankers between the MFMs and the flow boom on board the five suspended tankers.

The MPA said these alterations had allowed bunker fuel measured by the MFM to be siphoned out, undermining the accuracy of the readings from the MFM system.

As a result, Panoil - ranked Singapore's 10th-biggest supplier last year - will no longer be allowed to operate as a bunker craft operator at the Asian port.

"IBIA continues to support vigilance and firm action by the Maritime and Port Authority of Singapore (MPA) and other relevant authorities to deal with suspected irregularities, and considers it important that all proven cases of abuse of the MFM protocol are dealt with as swiftly as possible in order to retain the confidence of the global shipping community in the application of the MFM regulations," IBIA said.

"IBIA is confident that MPA will continue to take appropriate measures to punish and discourage malpractices in this area so as to not harm Singapore's hard fought reputation as one of the world's leading and most reliable bunker ports," IBIA added.