FAQ

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.

This is an electronic market place where a buy – sale automated platrom is provided for flawless trading between the members.

First and only delivery based platform and made exclusively for petroleum products in India. PetEx is built on the principle of Auction and Reverse Auction at a predetermined time twice a day for 2 – 3 hours. The delivery will be made on T+1, T+2, T+7.

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.

PetEx has prescribed the following three categories of Members –

A. Trading cum Clearing Member (TCM) – The TCM membership shall entitle the Members to trade and clear, both for themselves and / or on behalf of their clients and also clear the trades done through other Trading Members.

B. Commodity Participant Member (CP) – CP membership shall entitle the Members to trade on their own account only

The Commodity Participant Membership is classified in two categories as under –

i. Single Commodity CP Membership – Member can trade in only one single commodity or segment opted for and expressly approved by PetEx.

ii. Multiple Commodity CP Membership – Member is allowed to trade in all the commodities across all the segments

C. Clearing Member (CM) – CM membership shall entitle the Members to only clear the goods / trades on behalf of the trading member or commodity participant.

Premium or Continuous Auction 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 Auction 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 Auction, 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 Auction the Seller gives a Base price to start the Auction.

Bilateral Auction 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 Auction 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 Auction, so that matching of the trade takes place and the bid is obtained.

In this type of Auction the Seller gives a Base price to start the Auction.

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.

At 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

2.PETA – PETROLEUM “A CLASS” PRODUCTS
NAPHTHA, BENZENE, TOLUENE, PENTANE, 99 OCTANE PETROL, CONDENSATE, PETROLEUM ETHER

3.PETB – PETROLEUM “B CLASS” PRODUCTS
XYLENE, KEROSENE, ATF, MTO, WHITE OIL (LAWS), HIGH FLASH DIESEL, C 9.

4.PETR – PETROLEUM “C CLASS” AND BEYOND
FURNACE OIL, LDO,  BITUMEN, BASE OIL, C 10, PETROLEUM COKE, GELSONITE, LSHS,

5.BIOD – BIOFUEL PRODUCTS
BIODIESEL, BRIQUETTE, PYROLYSIS OIL, PLASTIC OIL

6.ALCO – ALCOHOLS
METHANOL, ETHANOL

7.PTCM – PETROCHEMICALS
NAPHTHA, BENZENE, TOLUENE, HDPE, LDPE

8.CHEM – CHEMICALS
SULPHUR, CRYOSOTE OIL

9.CRUD – CRUDE OIL
CRUDE OIL

LPG or LP Gas is Liquefied Petroleum Gas. This is a general description of Propane (chemical formula C3H8) and Butane (chemical formula C4H10), either stored separately or together as a mix. These gases can be liquefied at normal temperature by application of a moderate pressure increase, or at normal pressure by application of cooling using refrigeration. LPG comes from two sources. It occurs naturally in oil and gas fields and is separated from the other components during the extraction process from the oil or gas field. LPG is also one of the by-products of the oil refining process.