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.