34.9 C
Delhi
Tuesday, September 22, 2020

Petrol, diesel futures trading to start soon on exchanges

- Advertisement -

Petrol and diesel prices may not spike, remain in checkNew Delhi, July 12 (IANS) Market regulator Securities and Exchange Board of India (SEBI) may soon allow futures trading in auto fuels petrol and fiscal giving an opportunity to bulk consumers of these petroleum products to hedge their risks from a volatile market where there is a sudden spurt in prices.

Sources said that petroleum ministry has approved the plan to allow trading of petroleum products in the derivative market and the commodity exchanges would be able to launch petrol and diesel futures soon after SEBI releases its final regulations in this regard.

Futures are financial contracts which help the buyer to purchase a commodity, or the seller to sell the commodity, at a predetermined future date and at a predetermined price. In the case of petrol and diesel, the derivative product would involve buying a specified quantity of the at a specified price with delivery set at a specified time in the future. In a rising market where prices of fuel is going up, the futures product would protect the participant from losing out as the financial product would hedge the risk and ensure uniform pricing of the commodity.

“It is a good development as it will allow industrial and bulk consumers of the two petroleum products to hedge their risks. But in current market conditions, in the absence of a big pick up in demand oil prices are either stable or falling, hedging would work against the interest of participant as it would add up to the cost of hedging,” said an oil sector analyst asking not to be named.

Currently futures trading is allowed in crude oil giving opportunity to refiners to hedge their risks against frequent price fluctuations. The addition of petrol and diesel with give them another instrument to hedge their refining margins.

Sources said that as current market conditions may not be conductive for a futures market in petroleum products, it may wait before intruding the new product in the market.

Petrol and diesel futures in any case will not benefit retail customers as the quantum of fuel used by them would be low. SEBI may allow derivative products with a floor of say 100 litre of petrol and diesel. This will be too high a level for retail customers to participate in the futures market.

Futures contract in petrol and diesel are expected to be ideal for refiners, transport companies, petrol pump owners, etc. who are exposed to daily price fluctuations in the petroleum products. Railways, aviation, fleet owners and industrial consumers could also take benefit from the product.

In India a part from volatility in international markets, petrol and fiscal prices are also impacted by frequent changes in government duties, both at central and state levels, on the two products. The futures contract can help against these unforeseen price increased too.

-IANS

India Updates
India Updates is an independent news & Information website. Follow us for regular updates on News and Information.

Follow Us On

Related News

Tokyo Olympics will be my best, says archer Atanu Das

New Delhi, Sep 22 (PTI) Indian archer Atanu Das has vowed to dish out his best performance at next year''s Tokyo Games, saying he...

Without comprehensive reforms, UN faces ‘crisis of confidence’: PM Modi

United Nations, Sep 22 (PTI) The United Nations faces a "crisis of confidence” without comprehensive reforms, Prime Minister Narendra Modi has said, asserting that...

More than Rs 1cr used to manage delhi protests, reveals chargesheet

New Delhi, Sep 22 (IANS) A recent chargesheet filed by Special Cell of the Delhi Police in connection with the alleged conspiracy in the...

Epidemic Diseases Bill passed in LS to protect frontline Covid workers

New Delhi, Sep 22 (IANS) A bill which proposed protection to frontline workers, including healthcare professionals, was passed on late Monday night proceedings of...

LS passes amendment in Insolvency and Bankruptcy Code

New Delhi, Sep 21 (IANS) The Lok Sabha on Monday passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020, whereby fresh insolvency proceedings...

Not believe in act of God, Covid vaccine expected in early 2021: Harsh Vardhan

New Delhi, Sep 22 (IANS) Union Health Minister Harsh Vardhan assured the Lok Sabha that the Central government is not just waiting for "act...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Trending Topics In India

Covid 19 India Updates

Epidemic Diseases Bill passed in LS to protect frontline Covid workers

New Delhi, Sep 22 (IANS) A bill which proposed protection to frontline workers, including healthcare professionals, was passed on late Monday night proceedings of...

Epidemic Diseases Bill passed in LS to protect frontline Covid workers

New Delhi, Sep 22 (IANS) A bill which proposed protection to frontline workers, including healthcare professionals, was passed on late Monday night proceedings of...

Not believe in act of God, Covid vaccine expected in early 2021: Harsh Vardhan

New Delhi, Sep 22 (IANS) Union Health Minister Harsh Vardhan assured the Lok Sabha that the Central government is not just waiting for "act...

COVID-19 recovery rate in India crosses 80 per cent mark

New Delhi, Sep 21 (PTI) India''s recovery rate of COVID-19 cases has crossed the 80 per cent mark with over 90,000 recoveries recorded for...

More than 78% people used connections to get Covid ICU bed: Survey

New Delhi, Sep 21 (IANS) Only four per cent patients were able to get a Covid-19 ICU bed through the routine process, while 78...

ICMR completes second serosurvey, analysis underway in final stage

New Delhi, Sep 20 (IANS) The Indian Council of Medical Research (ICMR) has completed the second round of the countrywide serological survey (serosurvey) to...

Trending News In India

Rajya Sabha passes 7 key bills in three and half hours

New Delhi, Sep 22 (PTI) In one of the most productive days in its history, Rajya Sabha on Tuesday in a matter of three...

Rajya Sabha passes 7 key bills in three and half hours

New Delhi, Sep 22 (PTI) In one of the most productive days in its history, Rajya Sabha on Tuesday in a matter of three...

Without comprehensive reforms, UN faces ‘crisis of confidence’: PM Modi

United Nations, Sep 22 (PTI) The United Nations faces a "crisis of confidence” without comprehensive reforms, Prime Minister Narendra Modi has said, asserting that...

More than Rs 1cr used to manage delhi protests, reveals chargesheet

New Delhi, Sep 22 (IANS) A recent chargesheet filed by Special Cell of the Delhi Police in connection with the alleged conspiracy in the...

Epidemic Diseases Bill passed in LS to protect frontline Covid workers

New Delhi, Sep 22 (IANS) A bill which proposed protection to frontline workers, including healthcare professionals, was passed on late Monday night proceedings of...

LS passes amendment in Insolvency and Bankruptcy Code

New Delhi, Sep 21 (IANS) The Lok Sabha on Monday passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020, whereby fresh insolvency proceedings...

Trending Showbiz

Sachin Khedekar: No actor can rise above a bad script

Mumbai (IANS) Actor Sachin Khedekar believes a good script is truly important for an actor to showcase his acting skills.“The script plays one of...

Negativity not in Bollywood, exists only on TV channels: Anubhav Sinha

By Justin Rao, Mumbai, Sep 21 (PTI) Anubhav Sinha says the negative perception about the Hindi film industry has been manufactured on TV news...

Don’t ask actors about things not related to them: Manoj Bajpayee

BY DURGA CHAKRAVARTY (IANS) Bollywood celebrities are asked for their opinions on just about everything these days, National Award-winning actor Manoj Bajpayee notes. How...

Manushi Chhillar: Don’t think your size defines your fitness

Mumbai, Sep 20 (IANS) Beauty queen-turned-actress Manushi Chhillar says fitness for her is all about finding a balance, and that is actually a personal...

Fashion designer Sharbari Dutta found dead at Kolkata residence

Kolkata, Sep 18 (PTI) Eminent fashion designer Sharbari Dutta was found dead under mysterious circumstances at her Kolkata residence, prompting the police to register...

Sushant case: Forensic re-examination hints at discrepancies

New Delhi, Sep 17 (IANS) The 'medico legal opinion' of forensic experts, which holds the key to unravelling the mystery shrouding the death of...

Trending Sports

Tokyo Olympics will be my best, says archer Atanu Das

New Delhi, Sep 22 (PTI) Indian archer Atanu Das has vowed to dish out his best performance at next year''s Tokyo Games, saying he...

Padikkal, Chahal star in RCB’s win over SRH

Dubai, Sep 21 (IANS) A brilliant half-century from debutant Devdutt Padikkal followed by some class spin bowling from Yujvendra Chahal helped Royal Challengers Bangalore...

Rayudu, du Plessis 50s give CSK winning start in IPL

Abu Dhabi, Sep 20 (IANS/GloFans) Faf du Plessis and Ambati Rayudu's master class helped three-time champions Chennai Super Kings beat arch-rivals and reigning champions Mumbai...

We’ve to make sure Delhi Capitals do right by the fans: Ponting

Dubai, Sep 20 (IANS) Delhi Capitals (DC) coach Ricky Ponting expects his players to “do right by the fans” and give their best in the face...

BCCI, Emirates board sign MoU to boost cricketing ties

Dubai, Sep 20 (PTI) The BCCI and Emirates Cricket Board (ECB) on Saturday signed a Memorandum of Understanding (MoU) and hosting agreement to boost...

Plan to send Indian boxers to Europe for traning, competition

New Delhi, Sep 19 (IANS) Senior Indian boxers could go on a 45-day long European tour, with possible stops in France, Italy, and Poland,...

Latest Trending News In India

Tokyo Olympics will be my best, says archer Atanu Das

New Delhi, Sep 22 (PTI) Indian archer Atanu Das has vowed to dish out his best performance at next year''s Tokyo Games, saying he...

Rajya Sabha passes 7 key bills in three and half hours

New Delhi, Sep 22 (PTI) In one of the most productive days in its history, Rajya Sabha on Tuesday in a matter of three...

Without comprehensive reforms, UN faces ‘crisis of confidence’: PM Modi

United Nations, Sep 22 (PTI) The United Nations faces a "crisis of confidence” without comprehensive reforms, Prime Minister Narendra Modi has said, asserting that...

More than Rs 1cr used to manage delhi protests, reveals chargesheet

New Delhi, Sep 22 (IANS) A recent chargesheet filed by Special Cell of the Delhi Police in connection with the alleged conspiracy in the...

Epidemic Diseases Bill passed in LS to protect frontline Covid workers

New Delhi, Sep 22 (IANS) A bill which proposed protection to frontline workers, including healthcare professionals, was passed on late Monday night proceedings of...