28JUN2019 - NEWS - Power Generation companies worried over rate hike due to shipping’s fuel shift

Power generation companies are worried that the shift of shipping vessels to low sulfur-content marine fuel could hike freight costs that will in turn have higher pass-on cost effect to electricity consumers. That is in line with the International Maritime Organization’s (IMO) regulation prescribing that come January 2020, the sulfur content of bunker fuel used in shipping vessels shall already be capped at 5,000 parts per million (or 0.5%) from currently at 35,000 ppm (3.5-percent).

In the Philippines, there is a move to delay the enforcement of the IMO mandate by at least five years, but it is perceived that sourcing of fuel with 35,000ppm may eventually emerge as a problem for domestic-operating maritime vessels.

And for the power sector, it is a reality that they cannot avoid because their imported fuels are cruising through international waters, so they could be affected immediately by that regulation.