Govt prepping Malaysia’s bunkering hub to overtake Singapore


THE government is reviewing existing regulations and policies that would allow Malaysia to emerge as a bunkering hub after years of playing second fiddle to Singapore.

Transport Minister Anthony Loke said despite the strategic locations along the Straits of Malacca — one of the most important waterways in the world — bunkering business in the country is still losing out to Singapore due to various shortcomings in facilities.

“We are embarking on the development of Malaysia as a bunkering hub, taking advantage of our strategic location at the busiest shipping lane in the world,” he told reporters after the launch of the World Maritime Week 2019 at the Kuala Lumpur Convention Centre (KLCC) yesterday.

Loke said talks between the Ministry of Transport (MoT) and the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) has already started and a taskforce has been formed, with a review of the current regulations being the top agenda.

“We are reviewing all of these regulations and are hoping to streamline it.

“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 the government’s red tape.

“Talks are ongoing…It is not that we don’t have bunkering facilities, but I think we are not big enough and there is a lot of room for improvement. A lot of potential can still be tapped because there are so many ships passing by the Straits of Malacca yearly, and all that is a business opportunity for Malaysia.

“We already had our initial meetings at the official level between MoT and KPDNHEP, and that will of course lay the foundation,” he added.

Loke said he will personally have a meeting with the KPDNHEP minister to finalise the details and come up with comprehensive policies on how to move the bunkering industry forward.

“Over the years, we thought that we have lost out in terms of bunkering because all ships passing by the Straits of Malacca have the need to refuel.

“However, most of the time, all these bunkering happen in Singapore, so we are losing out in terms of business to our neighbour.

“We see the need to expand and develop the needed infrastructure and ecosystem that would allow the country to tap into its profitability, as there are current shortcomings in terms of security, supplies and current regulations,” he added.

Loke said a whole ecosystem in terms of supplies, regulations and enforcement needed to be developed to reach the target.

“This would give confidence to the shipping lines that bunkering in Malaysia is safe, and that we can be transparent,” he said.

Loke said one of the steps already taken by the ministry to aid in the development of the bunkering industry is the commitment to implement the Sulphur 2020 regulations, a global rule that sets a 0.5% limit for sulphuric content allowed in fuel oil used on ships. The regulations will come into effect from Jan 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.

According to reports, the Malaysian bunkering sector accounts for around four million metric tonnes in annual fuel sales to shipping in Port Klang and Port of Tanjung Pelepas.

The bunkering services industry in Singapore was valued at RM2 billion in 2017.

In contrast, Malaysia’s market size is estimated to be at least three times more, which is worth about RM6 billion.