There are two main methods to price products, and both offer positive and or negative sides:
Fixed price offerings in US$/MT or US$/bbl which is usually offered for the first 12 months contract period and subject to review on yearly basis
Formula based pricing linked to Platt’s prices around loading dates LESS an agreed discount
Offers usually indicate a gross discount and a net discount to Buyer from Seller. The difference between the two is commission to be shared 50/50 between the brokers (Buyer’s side and Seller’s side).
Note: the most important element in the transaction are the procedures and this is where 99.9% of all deals fail to materialize. A careful review of procedures will reveal areas that are usually not workable for either side. If this cannot be overcome, then all negotiations fail.
Following links for pricing information are considered by most of our sellers to be the closest estimate of their invoicing prices. The invoiced prices are typically based on the three-day average (the day upon loading, preceding day and the following). Seller uses the actual price on the basis of NWE Platts.
All prices for the Buyer are according to Platt’s European Marketscan MINUS discount. The amount of the discount is not fixed, but varies according to:
• Type of the product (e.g., A1, Mazut, D2, etc.)
• Delivery terms
• Realization of the payment terms that can be reflected in additional discount
Seller can offer to Buyer a very competitive discount from Platts pricing. Exact pricing and discount will be solved directly during discussion between buyer and seller. Commissions for the beneficiaries are always paid by the Buyer according to NCNDA/IMFPA signed by the Buyer along with Contract/SPA. Buyer does not pay any Seller-side fees. Please note, that the commission must be reasonable – if it is too high, it may put the entire transaction in risk by increased the costs for the Buyer.