India abolishes import tax on very low sulphur fuel oil, to benefit shipping firms

The government has abolished import tax on very low sulphur fuel oil (VLSFO) thereby reducing costs for local shipping companies. International Maritime Organization’s new rules require ships to use fuels with sulphur content of no more than 0.5%. While local refiners including Indian Oil and Hindustan Petroleum have started making VLSFO, the fuel is not available at all Indian ports.

Rahul Bhargava, executive director at Essar Shipping, said the tax cut would help cope with demand. “There is a shortage of fuel for coastal movement of vessels,” he said.

A trade source said foreign vessels normally do their fuel bunkering at Fujirah and Singapore. “Tax exemption will reduce the cost and mostly help the local shipping companies”.