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Malaysian Transport Minister Datuk Ong Tee Keat [pictured] has said the sharp increase in the price of marine fuel is affecting cargo shipping trade.

Speaking at the 5th Asia Maritime & Logistic Conference and Exhibition 2008, Ong expressed concern regarding the recent surge in bunker prices and the effect it is having on the overall cost for transport and logistic service providers to move their cargoes.

"The shipping industry, for instance has witnessed more than 100 percent increase in the ship fuel in last 12 months. For example, the average cost of marine gas oil was only RM1.80 per litre in 2007 but in June, the price has jumped to RM3.60 per litre," Ong said.

"For example, the round voyage from Port Klang to Sibu which takes about nine days, the shipping cost has gone up to RM65,000, a 100 percent increase compared with last year," Ong told reporters at the Conference.

Ong's comments echo those made earlier this week by Nordin Mat Yusoff, Chairman of The Malaysian Shipowners Association (MASA). He expressed concern over the rise in bunker costs and said shipowners were left with little option but to raise freight rates or impose a higher fuel surcharge in order to cover costs.

Yusoff also predicted the rise in bunker prices was set to lead to future difficulties for shipping companies and urged the maritime and logistics industry to quickly address the issue of soaring fuel costs and its sensitivity to transportation costs.

Ong said future solutions would need to focus on improving fuel efficiency and the delivery of cargoes.

"Investment must be made in new transport equipment which are more fuel-efficient while new supply chain and inventory management systems need to be explored for a more efficient delivery system," he said.