South Korea to launch online oil product trading platform

South Korea plans to launch an online oil product trading platform, as part of efforts to bring down domestic oil prices by encouraging competition. The online trading system will start to operate in late March after test runs next month, the Korea Exchange (KRX) said. Oil refiners and exporters would join the online market as main sellers, while owners of fuel retail outlets would be the buyers. Any company that runs an oil business in South Korea can participate, although individuals and brokerages would be excluded from buying and selling. The ministry and KRX expect the online price to be 10 won (US$0.008) per liter or half a percent cheaper than current transactions. The basic trading unit has been set at 20,000 liters. Fuel retailers which are mostly privately owned, typically get their supply of petroleum products from one refiner under a long-term contract. Online trading will allow retailers to buy these products online from any refiner or importer. The ministry has also indicated that it plans to set up a futures market to trade oil products by the end of this year. (January 6, 2012)