Ioc Pays Higher Premium For Kuwait Diesel

It also agreed to pay a higher premium for the same volume of superior kerosene in a renewed the term contract for April 1996 to March 1997 sealed last week, they said.

The 1 per cent sulphur diesel price was agreed at a premium of around 70 cents per barrel to Middle East spot quotes, on a free-on-board (f.o.b.) basis, compared to the 40-cent premium in the previous deal, the sources said.

They said IOC would take about 10 per cent more 1 per cent sulphur diesel under the new contract. In the 1995-1996 term deal, IOC bought about 1.5 million tonnes of diesel from KPC.

 

Sources said there was still room under the new deal to add more 0.5 or 0.25 per cent sulphur diesel.

India has gradually shifted to buying 0.5 per cent sulphur diesel by monthly spot tenders.

It also buys two cargoes of 0.25 per cent sulphur diesel each month by tender.

Under the new term deal, IOC would also take about 1.08 million tonnes of kerosene, the same volume as in the previous contract, the sources said.

The kerosene price was agreed at a premium of 50-55 cents per barrel to MidEast spot quotes, f.o.b. basis, up from the 30-cent premium of the previous deal, they said.

The diesel and kerosene prices will be backdated to April 1996.

The term contract renewal has been delayed since May due to the general elections and the subsequent changes in government.

After concluding its KPC deal, IOC will soon start talks on renewing terms deals with Bahrain National Oil Co (BANOCO) and with Abu Dhabi national Oil Co (ADNOC), trade sources said.