* Proposed change in sulphur to 10 ppm from 500 ppm
* Change in line with China, India shift to cleaner fuel
* Feedback expected by beginning November 2016
By Jessica Jaganathan
Sept 6 Oil pricing agency Platts has begun
consulting with traders this week on a change it has proposed in
the sulphur content of its key gasoil benchmarks in Asia and the
Platts, a unit of S&P Global Inc, is proposing to
lower the sulphur specification in its benchmark gasoil
assessment from 500 parts per million (ppm) of sulphur to 10
ppm, it said in a note to subscribers on Monday.
The potential change would be applied to benchmark Singapore
and Middle East gasoil assessments, used as the pricing basis
for contracts for the fuel in Asia, and reflects the changing
standards for the fuel across the region.
As vehicle use grows globally, with Asia accounting for most
of the gains, the movement towards cleaner fuel standards to cap
sulphur emissions has gathered pace. Newly built refineries are
also producing cleaner fuels in larger volumes.
"Changes in the waterborne trade since 2013, coupled with
new goals set by countries to move to even lower-sulphur fuel,
suggest that the time is ripe to begin discussing further
potential changes in the benchmark," Platts said in the
Asia's key oil consumers China and India are moving towards
cleaner fuel standards, pushing up trading volumes in gasoil
with 10 ppm sulphur.
Australia, which has shut many of its ageing refineries, has
also become a key importer of 10 ppm sulphur gasoil, traders
In a briefing in Singapore on the proposed change on
Tuesday, Platts said as yet there is no timeline for
Reflecting the changing fuel standards, trading volumes of
500 ppm sulphur gasoil in the Platts Market-on-Close assessment
process fell to 70 percent of overall volumes in 2016, from 84
percent in 2013, the company said on its website.
Trading volumes of 10 ppm sulphur diesel, however, jumped to
30 percent in 2016 from 9 percent in 2013. Trade in gasoil with
2,500 ppm sulphur ceased in 2015, Platts said explaining its
rationale for the proposal.
Still, some push back from the market to the proposed change
could be expected as Asian countries have not uniformly accepted
the new fuel specifications.
Key diesel consumers such as Indonesia, Bangladesh and
Vietnam are still using gasoil with higher sulphur content such
as 3,500 ppm and 500 ppm.
Platts last changed the sulphur content in its benchmark
gasoil grade to 500 ppm from 5,000 ppm in January 2013.
That change was initially criticized by some traders as
coming before Asia was ready, but it was accepted quickly.
Platts is inviting feedback to its latest proposed change by
Nov. 1 this year.
(Reporting by Jessica Jaganathan in OSLO, with additional
reporting by Seng Li Peng in SINGAPORE; Editing by Tom Hogue)