04-08-2025, 12:02 PM
India’s bunker fuel market is a crucial segment of the country’s maritime and energy sectors, driven by its strategic location along major international shipping routes and growing port infrastructure. Bunker fuel, used to power ships, is witnessing significant changes due to global environmental regulations, shifts in fuel preferences, and India’s push for cleaner energy alternatives. The market is primarily dominated by high-sulfur fuel oil (HSFO), very low-sulfur fuel oil (VLSFO), and marine gas oil (MGO), with increasing interest in liquefied natural gas (LNG) and biofuels. The India bunker fuel market is poised for steady growth, supported by expanding maritime trade and cleaner fuel transitions. While challenges like infrastructure gaps and price volatility persist, government initiatives and investments in LNG, biofuels, and hydrogen present significant opportunities.
Key Market Drivers
1. Expanding Port Infrastructure and Maritime Trade
India’s major ports, including Jawaharlal Nehru Port Trust (JNPT), Mundra, and Chennai, handle a significant volume of container and bulk cargo traffic. The government’s Sagarmala Programme, aimed at modernizing ports and enhancing coastal shipping, is boosting bunker fuel demand.
2. IMO 2020 Sulfur Cap and Shift to Low-Sulfur Fuels
The International Maritime Organization’s (IMO) 0.5% sulfur cap has led Indian refiners and suppliers to increase VLSFO and MGO production. Major bunkering hubs like Kochi and Mumbai are adapting to meet global compliance standards.
3. Rising LNG Bunkering Potential
India is exploring LNG as a cleaner marine fuel, with projects like the Kochi LNG terminal and planned bunkering facilities at major ports. LNG-powered vessels and coastal shipping initiatives could drive future demand.
4. Government Policies and Green Shipping Initiatives
The Harit Sagar (Green Port) Guidelines and India’s National Green Hydrogen Mission promote sustainable marine fuels, including hydrogen and ammonia, positioning India for long-term decarbonization in shipping.
Challenges Facing the Market
1. Price Volatility and Supply Constraints
Fluctuating crude oil prices and dependence on imported feedstock impact bunker fuel pricing, affecting shipping operators’ profitability.
2. Limited Bunkering Infrastructure
Despite having major ports, India lacks dedicated bunkering facilities compared to global hubs like Singapore. Expanding infrastructure is critical to becoming a competitive bunkering destination.
3. Compliance with Stricter Environmental Norms
Shipowners face rising costs due to IMO’s Carbon Intensity Indicator (CII) regulations, requiring investments in scrubbers or alternative fuels.
Key Market Drivers
1. Expanding Port Infrastructure and Maritime Trade
India’s major ports, including Jawaharlal Nehru Port Trust (JNPT), Mundra, and Chennai, handle a significant volume of container and bulk cargo traffic. The government’s Sagarmala Programme, aimed at modernizing ports and enhancing coastal shipping, is boosting bunker fuel demand.
2. IMO 2020 Sulfur Cap and Shift to Low-Sulfur Fuels
The International Maritime Organization’s (IMO) 0.5% sulfur cap has led Indian refiners and suppliers to increase VLSFO and MGO production. Major bunkering hubs like Kochi and Mumbai are adapting to meet global compliance standards.
3. Rising LNG Bunkering Potential
India is exploring LNG as a cleaner marine fuel, with projects like the Kochi LNG terminal and planned bunkering facilities at major ports. LNG-powered vessels and coastal shipping initiatives could drive future demand.
4. Government Policies and Green Shipping Initiatives
The Harit Sagar (Green Port) Guidelines and India’s National Green Hydrogen Mission promote sustainable marine fuels, including hydrogen and ammonia, positioning India for long-term decarbonization in shipping.
Challenges Facing the Market
1. Price Volatility and Supply Constraints
Fluctuating crude oil prices and dependence on imported feedstock impact bunker fuel pricing, affecting shipping operators’ profitability.
2. Limited Bunkering Infrastructure
Despite having major ports, India lacks dedicated bunkering facilities compared to global hubs like Singapore. Expanding infrastructure is critical to becoming a competitive bunkering destination.
3. Compliance with Stricter Environmental Norms
Shipowners face rising costs due to IMO’s Carbon Intensity Indicator (CII) regulations, requiring investments in scrubbers or alternative fuels.