Bunker Fuel (Marine Oil) Guide

Bunker fuel refers to any fuel type stored in a ship’s bunker, or more recently a fuel tank. Depending on the vessel, bunker fuel may refer to white diesel or marine gas oil which is also known as low sulphur fuel oil (LSFO). Read on to learn all there is to know about bunker fuel.

What is bunker fuel?

The term ‘bunker fuel’ dates back to steam-powered ships which originally ran on coal and stored fuel inside of coal bunkers. Today, although fuel tanks have replaced coal bunkers, the name still remains.

As the term bunker fuel doesn’t refer to the fuel itself, it can donate to a number of fuel types, including heavy fuel oil (HFO) for large ocean-going vessels, marine gas oil (MGO), marine diesel oil (MDO) and marine fuel oil (MFO).

Until recently, most large commercial marine vessels used heavy fuel oil (HFO) to power their ships across the ocean.

Gas oil for marine use

Marine gas oil (MGO) refers to marine fuels that consist solely of distillates, the components of crude oil that evaporate in fractional distillation and are then condensed from the gas phase into liquid fractions. It’s similar to diesel but has a higher density and unlike heavy fuel oil (HFO), marine gas oil doesn’t need heating during storage.

If you’re a recreational boater, you can purchase gas oil (red diesel) but you must pay the full tax rate as you would for regular diesel. You must also declare to your supplier if you intend to use it to power a pleasure craft and must inform HMRC the percentage of fuel used for propulsion with the below.

Declaration

“I declare that [ ] % of the fuel purchased will be used for propelling a private pleasure craft.

I am aware that the Hydrocarbon Oil Duties Act 1979, which permits the use of marked diesel to propel private pleasure craft, only applies within UK waters. I acknowledge that nothing in that Act, or the making of this declaration, affects any restrictions or prohibitions that may apply to the use of fuel for propelling private pleasure craft outside UK waters, including any restrictions or prohibitions under the law of another Member State that apply within the waters of that Member State.”

However, when used for heating or electricity generation, red diesel can be obtained at the reduced duty rate.

Bunker fuel for recreational vessels

For smaller marine vessels such as yachts, you can use regular diesel (DERV) or gas oil (red diesel) but please check with HMRC regulations as it’s illegal to buy red diesel for propulsion use.

Bunker fuel 2020

Under the new global IMO sulphur cap, ships must only use marine fuels with no more than 0.50% sulphur content (ULSFO).

While the new regulations may not rock your boat, they are key in helping cut the amount of sulphur oxide in the atmosphere released from thick, sulphur-laden bunker fuel. Failure to comply will lead to fines or vessels being detained.

Ships can only continue to use heavy gas oil (HGO) if they are retrofitted with filters or scrubbers that reduce emissions to within legislation.

Read our IMO 2020 FAQ for more information.

Regular diesel vs low-sulphur

Sulphur is the most harmful contaminant in diesel and has serious environmental and health implications. It’s not toxic in its natural state, but when sulphur oxidises to create sulphur oxides, the molecules become extremely harmful.

ULSD is a cleaner-burning fuel that contains 97% less sulphur than LSD (low sulphur diesel) and is key in tackling climate change.

Simply swapping your fuel to ULSD is the easiest route to take but it’s crucial that a professional company uplifts your old high sulphur fuel and cleans your tank to reap the fuel benefits of low-sulphur fuel.

Bunker fuel prices

IMO 2020 has transformed marine fuel for oil refiners from essentially a waste product sold at a discount to crude into one of the industry’s most valuable assets. Both very low sulphur oil (VLSFO) and marine gas oil (MGO) have seen a price spike as a result of the new law.

However, bunker fuel is generally inexpensive when bought in bulk amounts over 1,000 litres, providing even bigger savings for the end-user.

How a-bout it?

For a quick and competitive price, call us today on 0330 123 5665. We can uplift your old fuel stock, clean your tank and deliver a fresh batch of low sulphur bunker fuel to keep your ship afloat.