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Bunker Fuel Guide

The shipping industry relies on fuel just as much as other industries, and its use is important to keep ships running and freight, passengers and essential goods moving. Bunker fuel also known as Marine Gas Oil (MGO) powers the shipping industry and ensures goods and services are delivered worldwide. But what exactly is bunker fuel, what are the benefits and how will it affect your business?

This guide will take you through many of the questions you may have on bunker fuel. If you have more queries after reading the below, then call our fuel bunker experts on 0330 123 1144.

What is bunker fuel?

Bunker fuel is any fuel that is used to power a ship, and its name is derived from where fuel used to be stored on a steamship – in its bunker. Today, ships use fuel tanks instead of bunkers, though the name still remains.

Bunker fuel isn’t a specific type of fuel, but rather a range of fuels which all fall under the blanket category of ‘bunker fuel’ which includes heavy fuel oil (HFO) often used in large vessels, marine gas oil (MGO), marine diesel oil (MDO) and marine fuel oil (MFO).

Gas oil for marine use

Gas oil for marine use is specifically called Marine Gas Oil (MGO) and is made from a blend of distillates. It derives from crude oil where the process of fractional distillation changes the gas into liquid fractions. Though similar to diesel, marine gas oil is of a higher density and unlike heavy fuel oil, marine gas oil does not need to be heated when stored.

Bunker fuel for recreational vessels

Whether you own a yacht or any other type of small vessel, you’re eligible to use regular road diesel. Owners of pleasure craft vehicles are also allowed to use rebated gas oil and red diesel, though you must read the HMRC regulations to ensure that your use case is accepted. You must declare to your red diesel supplier that you intend to use red diesel for recreational use on a pleasure craft, informing them of your percentage of fuel used.

What are the benefits of bunker fuel?

The benefits of bunker fuel all depend on the type of fuel that is being used, as bunker fuel relates to a variety of fuels. Below are the most widely used bunker fuels with differing benefits, discover which suits your shipping company best below:

Heavy fuel oil

All of the fuels listed, but specifically, HFO, are known for their high energy density, meaning they can store lots of energy in a small volume.

Marine gas oil and marine diesel oil

Cleaner burning when compared to HFO, for shipping companies wanting to have reduced carbon emissions MGO and MDO are the right choices. The lower sulphur content leads to fewer air pollutants being released.

Liquefied natural gas

It is significantly cleaner than heavy fuel oil, producing considerably less emissions when compared to HFO, making it more environmentally friendly for businesses.

Environmental impact

Though bunker fuel is a cost-effective and popular choice for shipping companies, there are also some negatives to the use of bunker fuels:

• Air pollution is a major concern as HFO releases an array of harmful pollutants into the atmosphere
• Sulphur oxides contribute to acid rain, breathing and cardiovascular issues
• Nitrogen oxides lead to smog and can cause respiratory issues
• Water pollution is also a concern with the use of bunker fuels as an accident or spill could lead to catastrophic damage to marine wildlife

Global Regulations

The UK adheres to both the national and international regulations governing the storage and use of bunker fuel, including the following:

Sulphur content limits – The International Maritime Organisation (IMO) has placed a global cap on the sulphur content of bunker fuel used in international shipping. Implemented in 2020, it means that ships must now use fuels with a sulphur content of less than 0.50%, a significant reduction from the previous limit which was 3.5%. For more information read our guide on sulphur levels in diesel.

Emission control areas – Even stricter sulphur content limits, currently sitting at 0.10% apply, in specific designated controlled areas, usually around coastlines and areas with sensitive ecosystems.

HFO Arctic Waters Ban – As of July 1st 2024, there will be a ban on the use of heavy fuel oil in arctic waters.

UK national regulations

Implementation of IMO regulations – The UK has adopted the regulations set by the IMO for bunker fuels through national legislation, including the Merchant Shipping Regulations Act 2006.

Control of Pollution Regulations Act 2018 – This further enforces the IMO sulphur cap within territorial waters.

The cost of bunker fuel

Due to the IMO global cap on marine fuel, what would essentially have been a waste product sold at a discount has become one of the most valuable assets for fueling ships and vessels. There have been price hikes for very low sulphur oil and marine gas oil due to the introduction of the 2020 law change, and there are several other factors that influence the price, including:

The type of fuel

Prices vary depending on the type of bunker fuel, with heavy fuel oil being the cheapest option, followed by marine gas oil and marine diesel oil. Liquefied natural gas and biofuels tend to be more expensive.

Supply and demand

Global prices significantly impact the costs of bunker fuels, as there are periods in which higher oil prices will lead to increases in bunker fuel costs as they derive from crude oil.

Fuel specification

Bunker fuels can be purchased with a variety of specifications, including sulphur content. higher-purity fuels that adhere to stricter regulations will usually come at a premium.

Marine fuel polishing

You need to have your fuel checked at least once a year, as water and diesel need to be kept separate. Also, temperature changes can affect your fuel’s performance, as drops in temperature can lead to sludge buildup in your tank. Contaminated diesel can cause a variety of issues including engine failure and even spillages if left untreated, which is why Beesley Fuels offers fuel polishing services to keep a high performance, and fuel uplift services so contaminated fuels can be removed safely.

Types of bunker fuel available

• Heavy fuel oil (HFO)
• Marine gas oil (MGO)
• Marine diesel oil (MDO)
• Marine fuel oil (MFO)

Buy bunker fuel with Beesley Fuels

We have supplied the shipping industry for over 50 years, so we understand the need for a smooth and speedy fuel delivery time. We aim to deliver bunker fuel to your business within 48 hours.

If you still have questions about our bunker fuels or would like to discuss your own requirements for it. Get in touch with one of our bunker fuel experts on 0330 123 1144 who will be able to answer any questions and help you with your queries.