Overcoming Price Barriers in India’s Bunkering Sector
India possesses the necessary infrastructure, including a coastline, refinery base, and cargo traffic, to emerge as a viable marine-fuel hub. However, it currently lacks a compelling commercial proposition that would prompt ship operators to purchase fuel locally instead of in Singapore. A recent DNV study indicates a significant gap in competitiveness, highlighting that while Indian ports sold approximately 2.25 million tonnes of marine fuel in 2024, Singapore dominated the market with 54.92 million tonnes. This discrepancy underscores a fundamental difference in market depth and suggests that Indian ports must focus on improving delivered costs and port-call economics to capture a share of the marine fuel trade.
The study reveals that demand for alternative fuels at Indian ports could reach between 42 to 65 petajoules by 2035 and 113 to 293 petajoules by 2047, depending on various scenarios. However, the research emphasizes that ships do not typically divert to refuel, meaning that demand must be generated from vessels already making scheduled calls at Indian ports. Consequently, the study identifies four key ports—Mundra, Jawaharlal Nehru Port, Chennai, and Tuticorin—as initial investment targets, advocating for a phased approach to developing methanol and ammonia bunkering capabilities.
A critical finding of the study relates to cost competitiveness, with conventional heavy fuel oil priced at around $545 per tonne in India compared to $353 in Singapore. To attract shipowners, the cost of alternative fuels would need to be significantly lower than competing locations. The proposed roadmap for developing India’s marine fuel market involves establishing safe methanol bunkering between 2026 and 2030, followed by expansion based on demonstrated demand and the development of ammonia safety procedures by 2035.
Challenges remain, including limited dedicated bunker vessels and fragmented regulatory approvals, which could impede progress. The study calls for clear safety protocols, transparent port charges, and a review of taxation impacting fuel prices. For investors, focusing capital on a few strategic ports rather than spreading resources thinly along the coast is essential for successful project financing. Ultimately, the study poses a crucial question: can Indian ports provide fuel that meets the price, reliability, and turnaround expectations of ship operators?
