Crude transshipment cargo on the decline at VPT

The Visakhapatnam Port Trust (VPT) is witnessing a decline in crude transshipment cargo.

Despite a reduction in the lighterage operation tariff charges by 30 per cent on very large crude carriers (VLCCs) operations, the port has not been able to attract enough crude transshipment cargo.

"Previously we were charging Rs 20 on each tonne of crude on ship-to-ship operations. Now we are charging only Rs 14. Still we are not getting enough crude transshipment cargo," K S D Dathu Raju, traffic manager at VPT, told Business Standard.

Till a few years back, the port handled a significant amount of crude transshipment cargo every year. Of the total POL (petroleum, oil and lubricant) cargo handled by VPT, about 40 per cent was transshipment cargo only.

But during the 2003-04 fiscal, out of the total cargo handled by the port, the crude transshipment cargo was only about 15 per cent. It declined to around 8 per cent during last fiscal, and this year it is expected to come down further to around 5 per cent.

With crude transshipment cargo the ports are able to earn a good amount of revenue with little efforts. But from the last two-three years, VPT has been facing a stiff competition from Kakinada port in getting crude transshipment cargo.

Usually state-owned Indian Oil Corporation (IOC) nominates VLCCs, which carries huge quantities of crude oil of around 2.5 lakh tonnes on each VLCC to different ports.

The VLCC operations on account of IOC are normally undertaken during September to March at Kolkata port and from March to August, the tankers are nominated to Visakhapatnam port.

But from the last two years, IOC has been preferring Kakinada port for VLCC operations. Owing to this reason, VPT crude transshipment cargo was reduced to 3.9 million tonnes in 2004-05 as against more than 7 million tonnes in 2003-04. To attract transshipment cargo, Kakinada port has reduced the handling and port-related charges significantly.

Keeping this in mind, VPT has also reduced vessel-related charges and levelled with Kakinada port. Still IOC is nominating VLCCs to Kakinada port. Recently on some oil companies request, VPT reduced the ship-to-ship operational charges for VLCCs by 30 per cent.

According to IOC, the weather conditions are more favourable at Kakinada port than VPT for VLCCs operations. Apart from this, tankers at Kakinada port can be navigated during night time also facilitating them to avoid detention.