Increased domestic LPG demand and enhanced exploration activities have pushed up utilisation and charter line rates of vessels this year, helping shipping lines improve their bottomlines, Varun Shipping said on Wednesday.
"During the current financial year, the utilisation and charter line rates of LPG vessels have improved considerably mainly due to an increased domestic LPG demand, partially generated by the Rajiv Gandhi Gramin LPG Vitrak Scheme," Varun Shipping chairman and managing director Arun Mehta told the shareholders at the AGM in Mumbai.
There was improvement in freight rates for the Aframax vessels in the crude oil sector. Global oil companies have upped their exploration activities in the North Sea, West Africa and Brazil which have improved the demand of AHTS (anchor handling & tug system) vessels, he said.
The company owns a diversified fleet of 20 vessels including 10 LPG carriers which is the largest LPG fleet in the country. It owns three Aframax crude oil tankers and seven AHTS vessels.
Though utilisation levels in the LPG sector was better last year, Indian vessels had to match the lower rates offered by foreign players which resulted in sub-optimal returns for the company, he said.
Crude oil tankers were affected by lower oil consumption all over the world due to the recession while AHTS vessel charter rates were down due to a sharp cut-down in deep sea exploration activities by oil companies, he said.