This would be the first ever refined petroleum products futures contract in India and would complement the recently launch Brent crude futures contract on the NCDEX. Furnace Oil finds large application in industries for power generation and its volatility affects the bottom lines of many manufacturers. Industries in India have no means through which they can hedge their furnace oil related energy risks as most of the product is produced and consumed in India. This contract would give them the much needed platform to hedge the same.
With this contract NCDEX will give for the first time an ‘Indian Furnace Oil Price’ which the exchange hopes would evolve as the benchmark for the domestic oil companies to price their Furnace Oil produce.”
