LONDON, Nov. 12, 2015 /PRNewswire/ -- South Africa's distance from the world's large oil producing and refining centres has meant that a system of import-parity pricing has developed, where domestic fuels are priced according to the marginal price of replacing them with supply from international trading hubs in Europe, the Middle East or Asia-Pacific.
For gasoline or diesel these import-parity prices are enshrined in the government-mandated Basic Fuel Price (BFP) formulas, which govern prices at the pump. But the market for jet fuel is unregulated, and each supplier has developed its own version of the BFPs, meaning competition is hard to judge and airlines have difficulty comparing bids received in their fuel buying tenders.
To help bring clarity to this trade, global energy and commodity price reporting agency Argus launched a daily price index on 9 November for jet fuel delivered to Durban, South Africa, as an import-parity reference price for jet fuel suppliers, trading firms and airlines operating in the region.
The jet fuel c+f (cost and freight) Durban cargo price can be found in the daily Argus Jet Fuel and Argus Asia-Pacific Products reports, and is based on the jet fuel price in the Mideast Gulf, adjusted for the cost of transportation of 35,000t jet fuel cargoes from the Mideast Gulf to the key South African import location of Durban, as assessed in the daily Argus Freight report.
South Africa is usually self-sufficient in jet fuel, but relies on imports — mostly from the Mideast Gulf or the west coast of India — when refineries are shut down for maintenance. Until now, the market has lacked an independent price reference that buyers and sellers of jet fuel can use when negotiating term supply contracts at the key OR Tambo Johannesburg aviation hub, which is connected to Durban by pipeline.
Argus Media executive chairman and publisher Adrian Binks said: "Argus is pleased to be the first global price reporting organisation to publish a South African price reference for jet fuel, and to bring transparency to the rapidly growing African aviation market."
Argus is committed to boosting energy price transparency in Africa, publishing more African crude price assessments than any other agency and having this year become the first international price reporting organisation to publish delivered prices in west Africa for gasoline, diesel and gasoil in its daily Argus West Africa Oil report.
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About Argus Media
Argus is an independent media organisation with 750 full time staff. It is headquartered in London and has offices in each of the world's principal commodity centres. Its main activities comprise publishing market reports containing price assessments, market commentary and news, and business intelligence reports that analyse market and industry trends.
Half of Argus employees are commodity journalists who specialise in reporting news and price information relating to physical energy and related commodity markets. They operate according to a rigorous Editorial Code of Conduct and a compliance and ethics policy that align with best journalistic practice, including the avoidance of conflicts of interest.
Argus is a leading provider of data on prices and fundamentals, news, analysis, consultancy services and conferences for the global crude, oil products, natural gas, electricity, coal, emissions, bioenergy, fertilizer, petrochemical, metals and transportation industries. Data provided by Argus are widely used for indexation of physical trade. Companies, governments and international agencies use Argus information for analysis and planning purposes.
Argus has 20 offices globally, including London, Houston, Washington, New York, Calgary, Rio de Janeiro, Singapore, Dubai, Beijing, Tokyo, Sydney, Moscow, Astana and other key centres of the commodity industries. Argus was founded in 1970 and is a privately held UK-registered company.
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