Mauritius turns to Saudi fuel after court bans Indian supplies

Port Louis : The island-nation of Mauritius has started buying fuel from Saudi Arabia’s state-owned oil company Saudi Aramco after a court ordered a ban on Indian fuel supplies because of a dispute between the country and a shipping firm.

For years, Indian oil refiner Mangalore Refinery and Petrochemicals Ltd (MRPL) has been the sole supplier to Mauritius of fuels such as gasoline and diesel. However, an Indian court has ordered a ship loaded with fuel from MRPL for the island to stay in port until the Mauritian government settles an outstanding $120 million payment to shipper Betamax over a contract dispute.

Mauritian Trade Minister Ashit Gungah told reporters on Thursday in the country’s capital of Port St. Louis that Aramco will supply fuel.

“I can reassure the population and economic operators that we have sufficient stock of fuel,” he said. “A first tanker is expected in the country during the weekend and two more tankers will arrive next week. A fourth tanker is due by mid-December,”

He said the supplies would be sufficient to meet demand until January 2018.

“Other friendly countries have also accepted to help Mauritius,” Gungah said.

The fuel issues stem from a dispute between the State Trading Corporation of Mauritius (STCM), which buys fuel from MRPL, and Mauritian-based shipper Betamax.

STCM in 2009 signed a 15-year contract with Betamax to transport fuels from MRPL in the southern the Indian state of Karnataka to Port Louis. The contract was worth 8 billion Mauritius rupees ($238 million), according to local media reports.

But in 2015 it terminated the contract with Betamax. The company won a case in June against STCM for premature termination at the Singapore International Arbitration Centre that awarded Betamax more than $120 million.

Betamax pressed the case at the Karnataka High Court after STCM did not make payment.

A Karnataka court order reviewed by Reuters directed port authorities at Mangalore “to refrain from providing any clearance” to the tanker Pacific Diamond from leaving India with 40,000 tonnes of unspecified petroleum product for delivery to STCM.

The ship is to be held until the next hearing on the matter on Monday, the order said.

Betamax can enforce the arbitration award against STCM’s assets in any country where the award is enforceable.

MRPL exports about 1.2 million tonnes of refined fuels to Mauritius a year.

MRPL will look at exporting the surplus fuel if the ban continues on supplies to Port Louis, a company official said on condition of anonymity.

An MRPL spokesman declined to comment on the matter while Saudi Aramco did not immediately reply to an e-mail.