Bunker Fuel Inventory — FIFO Valuation and Fuel Consumption in Voyage Costs

💡 Accountant's Note

Bunker fuel is the dominant variable cost in shipping — a large container ship burns 150–250 MT/day, at $600–700/MT = $90,000–175,000/day in fuel costs alone. Post-IMO 2020 (January 2020): sulfur limits for marine fuels dropped from 3.5% to 0.5% globally (0.1% in Emission Control Areas — ECAs). This created two dominant fuel grades: VLSFO (Very Low Sulfur Fuel Oil — 0.5% sulfur, used outside ECAs) and MGO (Marine Gas Oil — 0.1% sulfur, used inside ECAs, also used when VLSFO unavailable). Vessels with scrubbers (Exhaust Gas Cleaning Systems) can burn cheaper High Sulfur Fuel Oil (HSFO) even after IMO 2020 — creating a 'scrubber spread' economic advantage. Bunker inventory is maintained at vessel level: the quantity on board at voyage start, bunkers purchased at each port call, and bunkers consumed (calculated from vessel consumption certificates or flowmeter readings). Valuation: FIFO or weighted average — most shipping companies use FIFO.