Increasing Numbers of Luxury Charter Yachts Bunkering Outside the EU

Facing payments of up to 135% more in EU jurisdicitions than non-EU jurisdictions, superyachts are obviously attracted by massive savings. The big change this season can be put down to a number of factors:

The growing belief that ports in North Africa are not as dangerous as previously thought, nor that the fuel quality is lower than that in Europe.

The inconsistencies regarding duty payments in Europe.

Senior trader at Peninsula Petroleum, Richard Peacock, has helped 54 yachts in Tunisia this year alone, compared with 30 yachts the summer before. He says, “Algeria and Tunisia…are places that a lot of people are afraid to go because of a perceived quality issue and security threats. But actually it doesn’t exist and they are very safe - the fuel is clean.”

Captain of the 37 metre Chrimi II, Thomas Drekman, spoke from Palma Mallorca where “half of [his] neighbours [were] going to Algeria, for fuel". He agrees, saying, “Béjaïa in Algeria is an ISM-classified port. Once you arrive, it’s very safe, and the fuel quality is very good. We tested the fuel twice and every time we bunker we give it to an analyser and they find it’s low sulphur and really good fuel.”

The lack of understading regarding the amount of duty paid in Europe caused a number of issues back in January when three maxi yachts were boarded in San Remo, Italy and their purchase documents scrutinised. The situation has worsened this summer, adding to the tempatation of non-EU destinations for fuel.
 
Ugo Pastorino, director at Femo Bunker, comments, “Before people were playing on this grey area... It’s not that they’ve made [rules on duty paid] clearer now, just when there’s a doubt authorities complain, charge and chase for money... Maybe before [superyachts] could have four deliveries in Europe and four of those would be duty free. Now maybe two are duty free and two are duty paid and one could be questioned. It’s more difficult for sure.”
 
Going to non-EU countries, especially Turkey, Tunisia and Algeria, does however come with cultural and practical considerations. “[Béjaïa] is a commercial port and you’re treated like a commercial ship. You have to put out 30 or 40 documents all stamped. It’s very old school,” says Drekman. “It takes time - three hours to check in and out, not a 10 minute thing – [the port authorities] want refreshments, a bit of a chat, presents - you have to treat them with respect.”

These sorts of delays are simply not suitable for luxury charter yachts on a tight schedule.

Many yachts will see the savings and decide it’s worth the time and hassle. Femo Bunker quoted prices at €160/€165 cents per litre of fuel in Italy and €135/€40 cents per litre in France, compared to €65/€70 cents per litre in Tunisia. “A 70m yacht using 100,000 litres, at €70 cents per litre saves €70,000 compared with Italy, €50,000 against France,” says Pastorino.
 
Cheaper fuel is one thing, and if it gives yachts an economic reason to charter in the Mediterranean it will help to keep the charter industry in good shape. However, it could also spark interest in the more interesting locations where the fuel is stocked. Tunisia is currently building a luxury marina in Bizerte and Richard Peacock reckons it could go the same way as Montenegro - “In Montenegro in 2002 there were 17 boats going there and today it’s one of the largest destinations.”

Algeria and Tunisia…are places that a lot of people are afraid to go because of a perceived quality issue and security threats. But actually it doesn’t exist and they are very safe - the fuel is clean - Richard Peacock, Senior trader at Peninsula Petroleum