Subscriber note: Platts proposes to reflect ex-duty cargoes in CIF NWE jet

Platts requests feedback on a proposal to reflect ex-duty cargoes of jet fuel in its benchmark Jet CIF Northwest Europe Cargo assessment. This proposal follows a consultation launched by Platts on July 18, and which closed on September 3. Under this proposed approach, Platts assessment processes consider bids, offers and trades for any jet fuel cargoes that meet standard quality specifications, for arrival into Europe from January 1, 2014. Platts reflects cargoes with delivery ranges that typically fall within five-day delivery periods. The first delivery period affected by this proposed change would be cargoes bid, offered and traded for the December 28, 2013-January 1, 2014 delivery period. Platts currently reflects market conventions in its Jet CIF Northwest European physical cargo assessment, where jet fuel cargoes are expected to be "EU-qualified," which means free from import taxes. Following EU changes in taxation policy, which would make substantial supplies of jet fuel eligible for possible taxation after January 1, Platts new proposal will move its assessment away from this convention. As proposed, jet fuel ex-duty assessments would be exclusive of import duty and any importing fees, were they to apply. Platts assessment would reflect merchantable quality jet fuel that is eligible for supply, regardless of origin. Separately, Platts expects that its jet FOB ARA Barge assessment would continue to reflect EU-qualified material. Platts European jet fuel assessments will continue to reflect standard commercial Jet-A1 specifications, as defined by UK Ministry of Defence in DEFSTAN 91-91 and the Joint Fueling System Checklist. Platts July consultation, and this consequent proposal to update the basis for the CIF NWE cargo assessment, comes after the European Union announced changes to taxation for jet cargoes imported into the EU. Jet fuel imported from the Gulf Cooperation Council states, India, Venezuela, and Libya accounts for almost 80% of Europe's jet fuel imports, and currently enters the market duty-free. Imports from those regions would become non-EU qualified and could potentially face a 4.7% import levy from January 1, 2014, if the original announced changes to the EU's Generalized Scheme of Preferences were implemented. Platts recognizes efforts by the European Commission, the EU's executive arm, to provide greater clarity around the impact of these changes on jet fuel imports. The EC has drawn up proposals to make jet fuel permanently duty free from next year, recognizing the negative economic effect which could result from the imposition of an import duty. These proposals are being reviewed by member states. Platts believes that defining the basis of its cargo assessments as ex-duty will remove potential uncertainty around the definition of its benchmark assessments while tax policy is reviewed. Please send all comments by September 27, 2013, to europe_products@platts.com, with a cc to pricegroup@platts.com. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request. Additionally, Platts intends to create a repository on its jet fuel microsite -- platts.com/jetfuel -- for those wishing to submit written comments for public view.