Petroleum products are one of the most important and significant components for manufacturing industries in India. The Petroleum Trade is unique compared to other commodities. The need and type of consumers for Gas, Crude and finished Petroleum are significantly different.
The price of product may change significantly due to small difference in even one parameter, therby, necessitating offline negotiations and Logistics arrangement, particularly for large volume customers, including inter Oil Company transactions.
Crucial and beneficial for Oil Companies to participate, since PetEx would ensure physical delivery, unlike in the prevailing future commodity Exchanges, thereby providing credibility and real time transaction.
The PetEx will provide better value for bulk consumers and also customers using minor petroleum products like Benzene, Toluene, Hexane, etc, who are unable to source at a competitive prices. The prices of such products are quite volatile and would also provide better volumes and margins to the Oil Company.
1. PetEx is an online platform created in association with NCDEX e-Market Limited (NeML) (a 100% subsidiary of NCDEX). It is an e-market platform exclusively for petroleum products. PetEx will facilitate trade in the Physical (spot) market.
2. PetEx will serve as a market place where Oil Refineries, Industries, Importers, Exporters, Traders, Distributors and Re-sellers can sell and buy at the most competitive market determined prices.
3. PetEx is built on the principle of Forward and Reverse Auction at a specified time from Monday to Friday.
4. The growth and opening of the petroleum sector in India have brought the opportunity and need to provide different value-added services to the customers in this industry. To cover-up this need PetEx will provide information, data and Value-added Services.
5. PetEx is the first delivery-based spot market (e-Market platform) for trading of Petroleum Products in India.
All decontrolled petroleum products e.g. Furnace Oil, Light Diesel Oil, Bitumen, Base oils, solvents (Toluene, Benzene, Xylene, MTO, SBP) etc., Aviation Turbine Fuel (ATF), Naphtha, Liquefied Petroleum Gas (LPG), Propane, Pentane and Kerosene. Subsequently Natural Gas / CNG / LNG and Crude oil would be included. The associated products like Bio-Diesel, Ethanol, Methanol, biofuels, alternate energy etc. shall also be traded.
The Petroleum PetEx will have the following main customer segments:
• Oil companies
• Industries using petroleum products, petrochemicals and Chemicals
• Importers and Exporters
• Traders, Speculators and investors
• Financial institutions, fund managers, individual investors
• Multinational oil companies desirous to enter Indian markets.
• Neighbouring country oil companies / Govt.
1. PetEx Associate Member (PAM) – PAM is a company which is admitted by PetEx as a member, conferring upon him a right to trade (as a Buyer or as a Seller) in one single segment of product defined by PetEx and clear all trades executed on his own account only, through the Clearing House of PetEx. In case the Associate Member wants to expand his trading to additional Segments then he can do so by paying the additional fees, segment wise as prescribed by PetEx. However, he can expand the membership up to maximum of two segments.
2. PetEx Business Partner (PBP) – PBP is a company which is registered by PetEx as a member, conferring upon him a right to trade (as a Buyer/Seller) in all the segment of products defined by PetEx and clear all trades executed on his own account or on behalf of his clients and clear through the Clearing House of PetEx, as a PetEx Business Partner. PBPs are geographically assigned non-exclusive specific territories as per the business requirements of PetEx and appointed to specifically offer PetEx services to the territories assigned to them by PetEx.
3. PetEx Institutional Members (PIM) – PIM is an institution/ corporate who is admitted by PetEx as a member, conferring upon them a right to trade in all the segment of products defined by PetEx and clear through the Clearing House of PetEx, as an Institutional Member.
Continuous Trade (Auto Trade) is used for offering customers to all customers to give their Bid and purchase the product.Price and Time are the priority on which the trade is accepted. The highest bidder gets the products first. If the price is same the product goes to who submits the bid before the others offering the same price.
Trading session : The validity of offered product for Trading is usually for the ongoing session or for the Day.
Quotation : The Buyers and sellers can give the bid / price continuously during the validity of Trading session, so that matching of the trade takes place and the bid is obtained. Seller or Buyer can give quote / bid within the limits of circuit breaker.
Once the buyers offer price is matched / accepted by the seller, the trade is complete. The Buyer can see the product in his trade book. In this type of Trade the Seller gives a Base price to start the Trading.
Bilateral Trade is used for offering Select band of customers similar to limited tender. The quantity in these auctions are usually larger size and buyers and sellers are usually either Oil companies, Large traders, Industries with the relatively large requirement of products, Importers and Exporters.
Seller can give a Matching Price, which has to be Accepted by the Buyer. CONFIRMATION IS REQUIRED from the Buyer and Seller. The Trade can be viewed in Trade book Option.
Trading session : The validity of offered product for Trade can stretch from session, day to several days. Subject to the basic fact that the trading is completed within 11 days of initiation of the bid.
Quotation : The Buyers and sellers can give the bid / price continuously during the validity of Trading session, so that matching of the trade takes place and the bid is obtained.
In this type of Trade the Seller gives a Base price to start the Trading.
This is a forward Auction. (Seller initiated Auction). The Sellers offers to sell the product and gives an initial price / base price.
The buyers can see the quantity which is offered for sale. The initial price buyer can see if the sellers has allowed. Once the auction starts, he can see the last highest price bid.
The buyers can bid for full or part quantity offered in the auction.
the end of the Auction, the system shall generate the list of Bidders as per H1, H2, H3…… The seller takes the final call of approving or rejecting the bids received.
In the PetEx platform, all products are divided in 9 segment where the licencing and logistic issues are almost similar :
1.PGAS – GASEOUS PRODUCT
LPG, LNG, CNG, PROPANE, BUTANE ETC.
2.PETA – PETROLEUM “A CLASS” PRODUCTS
NAPHTHA, BENZENE, TOLUENE, PENTANE, CONDENSATE, PETROLEUM ETHER ETC.
3.PETB – PETROLEUM “B CLASS” PRODUCTS
XYLENE, KEROSENE, ATF, MTO, WHITE OIL (LAWS), C9 ETC.
4.PETR – PETROLEUM “C CLASS” AND BEYOND
FURNACE OIL, LDO, BITUMEN, BASE OIL, C10, PETCOKE, GELSONITE, LSHS, RECLAIMED OILS ETC.
5.BIOD – BIOFUEL PRODUCTS
BIODIESEL, BRIQUETTE, TYRE PYROLYSIS OIL, PLASTIC PYROLYSIS OIL ETC.
6.ALCO – ALCOHOLS
METHANOL, ETHANOL, N-BUTANOL ETC.
7.PTCM – PETROCHEMICALS
NAPHTHA, BENZENE, POLY-PROPELENE, HDPE, LDPE, 2-EH, BAM, ETC.
8.CHEM – CHEMICALS
SULPHUR, CRYOSOTE OIL, ANILINE OIL ETC.
9.CRUD – CRUDE