Platts clarifies merchantability of products reflected in Brazil diesel, gasoline DAP cargo assessments

Platts, part of S&P Global Energy, wishes to clarify that, in line with existing methodology guidelines, its Brazil DAP gasoline and ultra low sulfur diesel assessments are reflective of products of merchantable nature, which are openly traded on an equal basis in the wider market. Merchantability may pertain to aspects such as specification but also contractual terms or other aspects which may limit the fungibility of the product.

Platts currently publishes Brazil gasoline and ultra low sulfur diesel assessments on a DAP basis, differentiating US-origin and all-origin cargoes. Platts all-origin assessments reflect material that is traded openly in the marketplace and in line with standard market practices, regardless of origin.

Platts understands that, in the DAP Brazil markets for gasoline and ultra low sulfur diesel, all-origin material originating from entities that are subject to prevailing foreign sanctions, such as by the US Office of Foreign Assets Control, may not trade on an equal basis and on par with other material in the wider market. Platts assessments reflect material that is both merchantable and fungible.

As such, Platts DAP Brazil assessments for gasoline and ULSD do not currently reflect material supplied from entities directly sanctioned by the OFAC. Russian-origin diesel and gasoline continue to be offered to Brazilian market participants, regardless of origin, and continue to be reflected in these assessments if not directly cited on the OFAC list.

Any market indication that deviates from the basis of the assessment, due to it being not openly tradeable by or accessible to a critical mass of market participants on the basis of merchantability and fungibility, may be reviewed and excluded from the assessment process.

Platts continues to publish relevant market information amid its commitment to transparency. Where market indications received are corroborated as not openly tradeable in the market, Platts may indicate that in heards and commentaries where material is "restricted-access Russian-origin" ULSD or gasoline , and exclude these market indications from the assessment process.

Import flows into Brazil will continue to be reviewed on an ongoing basis, and Platts continues to seek feedback on the evolution of standard market practices and origins in the DAP Brazil refined products market.

Please send any further questions, comments or feedback to americas_products@spglobal.com and pricegroup@spglobal.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.