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Amid daily price fluctuations in the petrol-diesel prices, the ICEX is awaiting regulatory nod for petrol and diesel futures contracts. Stating that the futures in petrol and diesel will ease the price risk for the bulk consumers such as transporters, top official of ICEX expressed the need for a hedging tool to cover price risk involved in the daily price fluctuation of the fuels.
"We are awaiting regulator's approval for the petrol and diesel futures. Already Union Petroleum Ministry has given its in-principle approval but regulators' approval is awaited. There is no need to fear about speculation in this contract as it will be a monthly cash-settled contract, which will not allow manipulators on it," said Sanjit Prasad, Managing Director and CEO, ICEX here.
Prasad stated that the uncertainty over daily price fluctuations is causing financial loss to the bulk consumers such as truckers and transporters.
"Futures contract is designed to mitigate the risk of daily price movement. This is not a price discovery platform, but will act as a hedging platform. Therefore, this should be used for hedging purpose," said Prasad.
The Petrol and Diesel Futures would enable the retail outlets, large fleet owners, transporters, multiple bulk fuel consuming industries and indirectly the retail consumers to safeguard against the price uncertainty and protect their business margins, stated Prasad.
The exchange has already initiated product orientation for end-users to educate them on the contract specifications.
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