Bunkering outside EU offers huge savings
More superyachts than ever are reported to be leaving Europe for cut price fuel in Tunisia and Algeria this summer. Motivated by a growing realisation that there are no safety or quality issues with the fuel, they are also said to be put off by more assiduous authorities in the EU, charging for duty paid even though rules are still a 'grey area.'…
More superyachts than ever are opting to stock up on cheaper fuel outside of the EU, with the numbers of yachts going to Tunisia and Algeria almost doubling this summer, according to the bunkering sector. Attracted by huge savings, with superyachts facing payments of up to 135 per cent more in EU jurisdicitions than non-EU jurisdictions, the big change this season is down to a few attendant factors.
There is, firstly, a growing belief that North African ports are not as dangerous as was previously thought, nor is the fuel quality lower than in Europe. Inconsistency regarding duty payments in Europe is also contributing to the exodus.
Richard Peacock, senior trader at Peninsula Petroleum, who says he has assisted 54 yachts in Tunisia this year compared with 30 yachts last summer, said that:
“Algeria and Tunisia…are places that a lot of people are afraid to go because of a perceived quality issue and security threats. But actually it doesn’t exist and they are very safe - the fuel is clean.”
Captain Thomas Drekman, of 37m Chrimi II who spoke from Palma Mallorca where “half of [his] neighbours [were] going to Algeria, for fuel,” agreed:
“Béjaïa in Algeria is an ISM-classified port. Once you arrive, it’s very safe, and the fuel quality is very good. We tested the fuel twice and every time we bunker we give it to an analyser and they find it’s low sulphur and really good fuel.”
The lack of clarity on the amount of duty paid caused problems in January, when three maxi yachts were boarded in Sanremo, Italy to scrutinise their purchase documents. But the situation has worsened this summer, adding to the allure of non-EU destinations for fuel.
“Before people were playing on this grey area, “ said Ugo Pastorino, director at Femo Bunker. “It’s not that they’ve made [rules on duty paid] clearer now, just when there’s a doubt authorities complain, charge and chase for money.”
In reality he said that: “Maybe before [superyachts] could have four deliveries in Europe and four of those would be duty free. Now maybe two are duty free and two are duty paid and one could be questioned. It’s more difficult for sure.”
Going to non-EU countries, particularly Turkey, Tunisia and Algeria (but not luxurious Porto Montenegro) however, comes with cultural and practical considerations.
“[Béjaïa] is a commercial port and you’re treated like a commercial ship. You have to put out 30 or 40 documents all stamped. It’s very old school,” said Drekman.
“It takes time - three hours to check in and out, not a 10 minute thing – [the port authorities] want refreshments, a bit of a chat, presents - you have to treat them with respect,” he said.
Such time and delays would not suit yachts on a tight charter schedule.
Still, many yachts will look at the savings and decide it’s worth the hassle. Femo Bunker quoted prices for Italy at €160/165 cents per litre and €135/40 cents per litre in France, compared to €65/70 cents per litre in Tunisia. “A 70m yacht using 100,000 litres, at €70 cents per litre saves 70 thousand Euros compared with Italy, 50 thousand Euros against France,” said Pastorino.
Cheaper fuel is one thing, and if it provides yachts with an economic imperative to charter in the Med then that will help keep the charter industry in good shape. But it could also spark an interest in these more interesting locations, where the fuel is stocked. Tunisia is building a luxury marina in Bizerte and Peacock said it could well go the way of Montenegro:
“In Montenegro in 2002 there were 17 boats going there and today it’s one of the largest destinations.”
There is, firstly, a growing belief that North African ports are not as dangerous as was previously thought, nor is the fuel quality lower than in Europe. Inconsistency regarding duty payments in Europe is also contributing to the exodus.
Richard Peacock, senior trader at Peninsula Petroleum, who says he has assisted 54 yachts in Tunisia this year compared with 30 yachts last summer, said that:
“Algeria and Tunisia…are places that a lot of people are afraid to go because of a perceived quality issue and security threats. But actually it doesn’t exist and they are very safe - the fuel is clean.”
Captain Thomas Drekman, of 37m Chrimi II who spoke from Palma Mallorca where “half of [his] neighbours [were] going to Algeria, for fuel,” agreed:
“Béjaïa in Algeria is an ISM-classified port. Once you arrive, it’s very safe, and the fuel quality is very good. We tested the fuel twice and every time we bunker we give it to an analyser and they find it’s low sulphur and really good fuel.”
Port Béjaïa in Algeria is seeing more traffic from Europe this summer
The lack of clarity on the amount of duty paid caused problems in January, when three maxi yachts were boarded in Sanremo, Italy to scrutinise their purchase documents. But the situation has worsened this summer, adding to the allure of non-EU destinations for fuel.
“Before people were playing on this grey area, “ said Ugo Pastorino, director at Femo Bunker. “It’s not that they’ve made [rules on duty paid] clearer now, just when there’s a doubt authorities complain, charge and chase for money.”
In reality he said that: “Maybe before [superyachts] could have four deliveries in Europe and four of those would be duty free. Now maybe two are duty free and two are duty paid and one could be questioned. It’s more difficult for sure.”
Going to non-EU countries, particularly Turkey, Tunisia and Algeria (but not luxurious Porto Montenegro) however, comes with cultural and practical considerations.
“[Béjaïa] is a commercial port and you’re treated like a commercial ship. You have to put out 30 or 40 documents all stamped. It’s very old school,” said Drekman.
“It takes time - three hours to check in and out, not a 10 minute thing – [the port authorities] want refreshments, a bit of a chat, presents - you have to treat them with respect,” he said.
Such time and delays would not suit yachts on a tight charter schedule.
Porto Montenegro's tax and duty free fuel is a key factor in its popularity today
Still, many yachts will look at the savings and decide it’s worth the hassle. Femo Bunker quoted prices for Italy at €160/165 cents per litre and €135/40 cents per litre in France, compared to €65/70 cents per litre in Tunisia. “A 70m yacht using 100,000 litres, at €70 cents per litre saves 70 thousand Euros compared with Italy, 50 thousand Euros against France,” said Pastorino.
Cheaper fuel is one thing, and if it provides yachts with an economic imperative to charter in the Med then that will help keep the charter industry in good shape. But it could also spark an interest in these more interesting locations, where the fuel is stocked. Tunisia is building a luxury marina in Bizerte and Peacock said it could well go the way of Montenegro:
“In Montenegro in 2002 there were 17 boats going there and today it’s one of the largest destinations.”
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