ULSD dearer

High demand for clean diesel in Europe sends its price zooming

Published: Monday 31 December 2001

a recent spurt has been witnessed in the demand for ultra low sulphur diesel (ulsd), with several European countries switching over to the green fuel (containing 50 parts per million of sulphur). The resultant shortage has pushed up ulsd prices on the Rotterdam (Netherlands) barge market by us $20 a tonne.

The price of ulsd stood at us $ 54 over the London ipe (International Petroleum Exchange) gas oil futures, compared to the regular diesel quotes at around us $20 over the ipe -- a price gap of us $34 between two qualities of diesel. Oil traders say that the difference is twice as much as the tax break introduced by Germany in favour of ulsd and nearly three times as much as the tax advantage in Belgium.

European oil traders said refiners had been caught off-guard by Belgium's impending shift to the gas as traders began moving their systems to ulsd some time before the actual deadline. While Belgium is going in for an immediate change, many other European countries such as Germany, Sweden, Finland, Denmark, the Netherlands and the uk are also moving to ulsd.

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