Singapore, Jan 8: The Indian Oil Corporation (IOC) will have to pay the highest premiums it has ever faced to secure supplies in its latest surprise diesel tender, traders said last week. The temporary return in 2000 of the once key Asian buyer has put a tight squeeze on an already snug market, they said.IOC, which closed its second tender to buy January/February diesel on last Thursday on the back of domestic refinery woes, has received very few but very high offers, traders said. "India has come into the market at a very, very wrong time," one trader with a European oil company said."The market is very tight, not a lot of people can offer. The few who can squeeze barrels out would demand very high prices." Only a handful of traders offered into the tender at around $4.00 per barrel premiums and above to India's formula price, which is a 50/50 mix of Singapore and Middle East spot free-on-board (FOB) prices.It had sought 30,000 to 45,000 tonne cargo offers for delivery between January 26 andFebruary 15 into east and west coast Indian ports. The names of companies that offered the tender were not clear, but traders estimated that they would include BB Energy, Vitol and Glencore.In IOC's last tender for deliveries January 16-23, only four sellersBB Energy, Vitol, Glencore and Shelloffered into the tender. They were each awarded one 30,000 or 40-45,000 tonne cargo."If you had sweated it out with 0.25 per cent diesel, then it's boom time," one trader said. The award, at around $2.20 to $3.25 per barrel premium to the formula, depending on which delivery ports, came up to nearly twice as much as the prices India had paid when it tendered regularly up to late 1999.
