Bangalore: A depressed tanker market has helped India’s three state-run oil refiners secure 40% lower rates for hiring 22 ships from local fleet owners in a new annual contract that began earlier in May.
Indian Oil Corp. Ltd (IOC), Hindustan Petroleum Corp. Ltd and Bharat Petroleum Corp. Ltd have together hired 22 ships to haul petroleum products along the coast. Shipping Corp. of India Ltd (SCI) and Pratibha Shipping Co. Ltd supplied six ships each, Great Eastern Shipping Co. Ltd added seven, and Mercator Lines Ltd, Sanmar Shipping Ltd and Castle Shipping Ltd contributed one each.
India’s coastal trade is reserved for India-registered ships and foreign ships can be hired only when Indian ships are not available.
“We have secured a reduction of about 40% over the last year’s rates due to market conditions,” said an executive at IOC who coordinated the tender on behalf of the three oil companies.
“The day rates on the new shipping contract with state-owned oil companies have come down by about 40% this year,” said K. S. Nair, a director heading SCI’s bulk carriers and tankers division.
Day rates for hiring tankers have reduced to Rs2.28 lakh for small ships and to Rs8 lakh for the biggest ships, the IOC executive mentioned earlier said, requesting anonymity. The rate was about Rs3.02 lakh a day for small ships and Rs11.43 lakh a day for the bigger ships in last year’s contract, which ended in April, he added.