A STUDY OF MARINE BUNKERING POTENTIAL WITH SPECIAL EMPHASIS ON KOLKATA AND HALDIA PORT

PRESENTED BYDEBAJIT BHATTACHARJEEGLOBSYN BUSINESS SCHOOLKOLKATAENROLLMENT NO 010108077

AGENDA OF THE PRESENTATION

• OBJECTIVE OF THE PROJECT• BRIEF INTRODUCTION TO INDIAN OIL CORPORATION• OIL INDUSTRY OVERVIEW• OPERATING STRUCTURE OF IOCL• WHAT IS BUNKERING• WHAT IS BUNKER FUEL• TYPES OF BUNKER FUEL• 4P’S OF MARKETING RELATED TO MARINE BUNKERING• MARINE BUNKERING SALES ANALYSIS• FINDINGS• RECOMENDATION• ACKNOWLEDGEMENT• BIBLIOGRAPHY

OBJECTIVE OF THE PROJECT

• Bunkering business in India( Kolkata & Haldia port).

 

 • The project helps to gain in-depth knowledge regarding Kolkata

and Haldia port.

 • Detail data analysis comparison of Kolkata & Haldia port with its

competitor

 • It provides the detail analysis of 4Ps related to marine bunkering

with reference to Indian Oil.(Product, Price, Place and Promotion)

Brief On Indian Oil Corporation

• India’s largest commercial enterprise with leading market shares in downstream segment of Oil business.

• Highest ranked Indian corporate in Fortune’s list of World’s 500 largest companies(105th)

• 18th largest petroleum company in the world – Fortune Global 500.

• India’s ‘No. 1 Corporate’ in annual listing of Business Standard (BS 1000), Business India (BI Super 100) and Economic Times (ET 500).

OIL INDUSTRY OVERVIEW

Oil Industry : INDIA

Overview of operating structure

INDIAN OIL DOWNSTREAM OPERATION

Shareholding Pattern Of IOCL

WHAT IS BUNKERING

• Initially ships were driven by coal in the 19th century.

That coal was stored in bunker. Now coal is being

replaced by fuel oil & this fuel oil is stored in bunker .

This process of supplying this fuel oil to ship is known as

bunkering.

BUNKER FUEL

• Bunker fuel is a type of liquid fuel which is fractionally distilled from crude oil.

• Bunker fuel is also known as fuel oil, and a number of different classifications around the world are used to describe fuel oil.

• These classifications break bunker fuel into different categories based on its chemical composition, intended purpose, and boiling temperature. In comparison with other petroleum products, bunker fuel is extremely crude and highly polluting.

DIFERENT TYPES OF BUNKER FUEL

INDIA

FURNACE OIL (FO)

HIGH FLASH HIGH SPEED DIESEL(HFHSD)

LIGHT DIESEL OIL(LDO)

4Ps OF MARKETING RELATED TO MARINE

BUNKERING

PRODUCT

1) HIGH FLASH HIGH SPEED DIESEL(HFHSD)

HFHSD is designed for use in secondary engine because their waiting

time at Sand Head is very high before entering to Port. The secondary

engine is always remain for power support like onboard air-conditioning

and allied work. It is highly refined to give excellent performance with

freedom from exhaust smoke and minimum combustion chamber

products. It has the desired chemical stability and ignition quality due to

high cetane number and volatility. It is generally used for high RPM

engine like secondary engine of the ship.

• Furnace Oil: It’s a dark viscous product used as a fuel in industrial and marine boilers, furnace & marine engine.

• Light Diesel Oil : it is a low viscosity fuel recommended for slow speed engine operating below 750 rpm used in agriculture, marine and industrial sectors.

PRICE

• Two type of pricing is generally used

1. Bonded: bonded price is used for foreign vessel. Here no government duty is applicable. Indian oil supplies bonded product to those Ships which are going outside India.

2. Duty Paid: Duty Paid product is used for that vessel that is moving within India

Bunker Price compare - HFHSDPort for compare – Haldia, Kolkata, Singapore

&Fujairah

Nov-0

9

Dec-0

9

Jan-

10

Feb-

10

Mar-

10

Apr-1

0

May

-10

0

100

200

300

400

500

600

700

800

900

Fujairah

Singapore

Haldia

kolkata

Bunker Price Compare -FO 180cst Port for compare – Haldia, Kolkata,

Singapore &Fujairah

Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10May-100

100

200

300

400

500

600

700

Fujairah

Singapore

Haldia

kolkata

X-axis shows the price in us dollar

PLACE

• In this project special emphasize has given on Kolkata and Haldia port. Different types of data are Collected about Kolkata and Haldia port like

1. bunker fuel sales from Kolkata & Haldia port

2. Number of ships call, import & export in last 5 yrs, cargo Handling in last 20 years, container handling& other data

BREAK-UP OF TRAFFIC  HANDLED AT

KDS

2004 - 2005

2005 - 2006

2006 - 2007

2007 - 2008

2008 - 2009

0

50

100

150

200

250

300

kolkata Import

Haldia Import

Y axis-in lakh tonnes

BREAK-UP OF TRAFFIC  HANDLED AT HDC

2004 - 2005

2005 - 2006

2006 - 2007

2007 - 2008

2008 - 2009

0

20

40

60

80

100

120

140

160

kolkata Export

haldia Export

PROMOTIONAL ACTIVITY AT KOLKATA PORT

• Tariff flexibility• Establishing barge based terminal from

Kolkata to Narayanganj, which will reduce the transportation cost.

• Reducing barge delivery charges .• Providing better service .• Easy to get berth in the port.• Berth charges are comparatively less than

other ports

Marine Sales Analysis for the month of April 09-Mar 10 for Haldia

and Kolkata Port

Variation in Sales of Furnace Oil Duty Paid and Bonded at Haldia and Kolkata Port:

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Furnace Oil Duty Paid

HALDIA

0

1000

2000

3000

4000

5000

6000

Furnace Oil Bonded

HALDIAKOLKATA

Variation of sales analysis of bunker products in Kolkata and Haldia port

Sales Analysis of IFO 180cst Sales Analysis of HFHSD

HALDIA KOLKATA0

5000

10000

15000

20000

25000

HFHSD DP/ND

HFHSD Bonded

HALDIA KOLKATA0

5000

10000

15000

20000

25000

30000

FO DP

FO BondedA

xis

Tit

le

MARINE SURVEY ANALYSISSAMPLE SIZE:36

shipping tranporting shipbuilders dredging others0

2

4

6

8

10

12

12

2

1 1

2

NO OF MARINE CUSTOMER VISITED DURING SURVEY

1st 2nd 3rd0

2

4

6

8

10

12

14

16

iocl bpcl hpcl

MARKET POSITION OF IOCL

PIPELINE BARGE TRUCK

1

15

2

NUMBER OF COMPANIES

MODE OF TRANSPORTATION OF BUNKER FUEL TO SHIPING CUS-TOMERS

YES8%

NO92%

Effect Of Recession On Purchase Of Oil

17%

50%

33%

Purchase in last 5 years

HIGHLY INCREASED LITTLE INCREASED

STATIC DECREASED

below 3 yrs

3-6 yrs

6-10 yrs

above 10 yrs

not using

0 1 2 3 4 5 6 7 8

Companies Using IOCL Bunker Fuel

no of companies

very satisfied somewhat satisfied neither satisfied nor dissatisfied

dissatisfied0

1

2

3

4

5

6

7

8

9

price

quality

service

Y -AXIS REPRESENT NUMBER OF COMPA-NIESX -AXIS REPRESENT LEVEL OF SATISFAC-TION

REASON FOR CHOOSING IOCL BUNKER FUEL

Customers satisfaction regarding quantity of the oil bunker fuel

77%

23%

IOCL

SATISFIED NOT SATISFIED

47%

7%

40%

7%

Type of fuel taken by the companies

HFHSD LDO

FURNACE OIL ALL THREE

58%

42%

YES NO

Review supplier performance

FINDINGS FROM THE PROJECT

• Absence of strict monitoring in supplied quantity. Quantity mismatch between Indian oil corporation(invoice) and ships measurement(by sounding) specially at Kolkata port.

• Price is not maintained at the international level.• Oil is not available in small quantity in containers

according to the demand of the customers.• Supervising operations are not prompt at Kolkata

and haldia port

Limitations of the project• Limited sample size• Focused only at the Kolkata & Haldia port.• Survey is done only at kolkata.• Entry to certain department in government based

company was restricted by the authorities, hence that also proved to be a limitation.

• Certain information was considered confidential by the organization. So, unavailability of certain necessary information was also a limitation towards proper performance of the study

RECOMENDATIONS• Strict monitoring in supplied quantity to different

shipping companies.• Keep the oil price at the international level.• Maintenance of Machineries – The machineries should

be regularly maintained and the post breakdown period should be handled in a prompt manner.

• Dredging – Maintenance dredging should be done in a more regular manner.

• Availability of Pilots & Tug ships – There is a shortage of pilots as well as tug ships, so both these factors should be addressed to facilitate smooth movement of the vessels.

ACKNOWLEDGEMENT

I express my sincere thanks to my respected faculties Prof. Amitabha Ghosh and Prof. Richa Shukla for guiding me right from the inception till the successful completion of the project.

I am also grateful to Mr. Himanshu Ranjan (Sr. Manager Marine,E.R. ,Kolkata) who have helped me all throughout my internship and also in preparing my project.

BIBLIOGRAPHY

All the data collected for the purpose of the project are primary and secondary data .

Primary data are collected from different shipping companies and secondary data have been collected from the below mentioned websites.

www.bunkerworld.com

www.iocl.co.in

www.singaporeport.com

www.haldiaport.com

www.fujairahport.com

THANK YOU