SUBSCRIBER NOTE: Platts proposes updating Russia Med diesel, gasoil netback calculations

S&P Global Platts is proposing changing the underlying assessments for its Russian diesel and gasoil export netbacks with effect from May 1, 2018. The proposed change aims to bring the netbacks in line with the prevailing practice on the market.

For its Russian Med diesel and gasoil netbacks, S&P Global Platts currently uses CIF Med gasoil 0.1% assessment, however the market practice had changed towards the use of the FOB Med 10ppm ULSD assessments irrespective of the sulfur content of the diesel exported from Russia. The netbacks were launched when Russia's domestic diesel specifications as well as export flows were predominantly geared towards higher sulfur gasoil.

However, over the past few years, following a large-scale refinery modernization, Russian refineries have moved increasingly to lower sulphur product and in 2016 Russia adopted 10 ppm diesel as the obligatory standard for domestic product sales. While many refineries continue to produce and export gasoil, contract prices increasingly reference 10ppm assessments in the Mediterranean. Last year S&P Global Platts moved all its NWE diesel netbacks to reflect 10 ppm assessments in Northwest Europe.

S&P Global Platts therefore proposes to use for all of its current diesel and gasoil netback calculations in the Mediterranean the Platts 10 ppm ULSD Fob Med assessment (AAWYY00).

The proposal refers to the following assessments and respective codes:

Netbacks with a proposed change to 10ppm ULSD Fob Med:

- Norsi via Novorossiisk AAXKA00 - Syzran via Novorossiisk AAXKI00 - Omsk via Novorossiisk AAWKQ00

The respective monthly averages and conversions will also be affected.

Please send any comments and queries to europe_products@spglobal.com and pricegroup@spglobal.com by April 10, 2018.

For written comments, please provide a clear indication if comments are not intended for publication by S&P Global Platts for public viewing.

S&P Global Platts will consider all comments received and will make those not marked as confidential available on request.