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The Uruguayan bunker market is to cease selling marine diesel oil (MDO) to shipping customers from next month following a decision by the country's only refiner to reduce its marine fuel product range.

In a message sent today to local suppliers, state-owned oil company ANCAP (Administración Nacional de Combustibles, Alcoholes y Portland) said that its 40,000 barrel-per-day (bbl/d) La Teja Montevideo Refinery would be discontinuing production of DMB-grade MDO from March 1, 2013.

The decision to provide only marine gas oil (MGO) as a distillate product to clients follows the recent decrease in sales volumes in Uruguay, which has mainly been due to higher bunker prices compared to neighbouring markets and improved logistics and product availability in Argentina. Whereas Uruguay was previously able to regularly take advantage of any product availability issues in Argentina, the improved logistics situation there has meant that sales volumes in Uruguay have been affected as a result.

Bunker volumes in Uruguay are estimated to have fallen from 300,000 - 336,000 tonnes per year (25,000 - 28,000 tonnes per month) in 2010 to current levels of around 156,000 tonnes per year (13,000 tonnes per month). Sales of MDO product are the smallest amongst the four main grades of fuel - 380-centistoke(cst), 180-cst, MDO and MGO.

Last year, bunker supply firm Estimar S.A. stopped operating as a marine fuels supplier following a period of poor sales. The company had been the leading player in Uruguay's bunker market, supplying principally to customers in Alpha Zone, off Montevideo, and commanding a market share of 37-40 percent.

Estimar had close links to Norwegian bunker trading company Scandinavian Bunkering, which had been acting as Estimar's exclusive worldwide agent for several years.