Crawford mpany : Ongoing fuel oil quality issues present a possible impact on H&M / P&I insurers

With #IMO2020 approaching, it seems opportune to consider the ongoing implications of poor fuel oil quality in the marine industry, paying particular attention to the impact on vessel owners, managers, insurers as well as the environmental impact.

Despite the sulphur cap fast approaching in January 2020, poor fuel oil quality is still an issue for many vessel owners, managers and more often insurers. Poor fuel oil quality can be affected by something as simple as increased water content, bacteria content, sulphur content, vanadium content, aluminum + silicon content, variations in flashpoint and/or viscosity/density, as well as residue content to name but a few.

With the complex range of poor fuel oil quality issues, we are required to have utmost faith and trust in the providers of such fuel oil, but still, they get it wrong.

Over the past 10 or so years, by far the most damaging aspect of poor fuel oil quality appears to be the level and particulate size of catalytic fines (aluminum and silicon), and it may get worse as the price of bunkers is set to soar.

Implications of excessive cat fines (Al + Si) range from H&M matters of abrasive damage to engines / boilers consuming the fuel oil to P&I matters involving collision and allision as a direct result of breakdowns, as well as demurrage during repairs and even possible loss of charter agreements altogether, despite fuel oil provision often being the charterers' agreed responsibility.

The majority of issues have over the years occurred using heavy fuel oil (HFO) of various viscosities; however, the short sea and small commercial craft are sustaining continuous abrasive issues with poor marine gas oil (MGO).

Whilst we understand that costs in relation to poor fuel oil quality for deep-sea vessels will be significantly higher than short sea vessels, the cost of poor fuel oil quality in small commercial craft is also significant, often amounting to GBP 250,000.00 for a complete engine overhaul.

Recent FOBAS studies have routinely found Al+Si levels in HFO up to 139mg/kg (almost twice the ISO 8217: 2017 specification) as well as considerably low flash points well below SOLAS minimum requirements of 60°C.

It's clear that the issue affects many areas of the industry to varying degrees, and so over the next few weeks, we will seek to look at specific areas in more depth, and hopefully provide you with some strategies/knowledge to assist you in addressing the issue should it arise in your business area.