WHY INDIA NEEDS PETROLEUM SPOT EXCHANGE
Petroleum products consumption in a country is one of the important indicators for growth of that country. With the growth in consumption, the oil industry gets into mode of changes like building new refineries, storage points, pipelines and import facilities. India is going through all these changes and much more.
The most important aspect which should also grow with this growth in the industry is the system which takes care of the changing mode and intricacies of the changing time. Particularly supply and distribution, indenting, credit facilities, payment and the process to deal with risks associated with it.
The retail outlet trade of petrol and diesel in India has changed a lot like having better retail outlets, dispensing units, better payment and delivery systems. And most important, the daily price change of petrol and diesel. However, the industrial segment has not seen any significant changes over the period. The price of industrial products like fuel and solvents are still changed every fortnight or monthly basis. Most of the large consumers do get some bargaining advantages if they agree to go in contract for supplies to a particular company.
Cartelization is the game
This is a fair world but not at all times. The world body of petroleum is the largest cartel Known as OPEC (Organization of Oil Producing Countries). To maximize profit and to ensure that world citizen do not get a fair deal they cartelize and control production to keep the crude prices favorable to them.
Look at the oil companies of any country, there are government and private major oil companies. They are price sensitive and they ensure that their prices are always cost, plus a fat margin. Even the government oil companies cartelize with other govt. and private companies to ensure that they keep the product prices high. These cartelization profits not only give a good return to the shareholders but also helps to cover up their inefficiencies and corruption.
In India the interdependence of oil companies is very high. They have refineries at very few locations and from these locations the meeting full requirements of customers at all nook and corner is physically and profitably is not possible. If they do not buy and sale amongst themselves, it will be impossible to retain clients. Without help from each other they will become regional players. Hence for mutual benefit, they agree to a name plate prices for industrial products. Now the game of discount offers starts. As a customer you may not see any logic, or similarity and or transparency. Depending upon your volume, closeness to the supply location and your able to convince the company official that why you should get a better discount, the rate is decided. May be the customer lands up signing a compulsory yearly contract.
How Petroleum Spot exchange (PetEx) help Customers
The most important and soul of the PetEx is the transparency, dependable, convenient and at best price. The large number of buyers reach out to large number of suppliers. The sellers and buyers are inducted to the exchange only after due KYC and ensuring that they have valid licences needed to buy / sale the products.
PetEx is the first and only platform in India, which provides opportunity to negotiate buy and sale of the products on a live platform, on daily basis. You may take a position after comparing the prices offered by different companies and from different locations.
At its full operation the products proposed to be offered in PetEx are Crude Oil, Pet coke, Furnace Oil, Aviation Turbine Fuel (ATF), Naphtha, Light Diesel Oil, Liquefied Petroleum Gas (LPG), Propane, Bitumen, Kerosene, Base oil, Bio-Diesel, Methanol, Ethanol, solvents (Toluene, Benzene, Xylene, MTO, SBP etc.). Natural Gas / CNG / LNG, Motor Spirit (MS), High Speed Diesel (HSD) etc. PetEx shall also offer Petrochemicals and Chemical in due course of time.
PetEx is a very innovative business process and first of its kind in India. It intends to create convenience with the use of latest software technology and a value for real-time transaction for buying and selling of petroleum products. PetEx looks forward to partnering with various stakeholders and bring a change in the Petroleum Eco system.