In a major development, it has been reported that markets regulator Securities and Exchange Board of India (Sebi) is looking at permitting futures trading in petrol and diesel. Currently, futures trading is allowed in crude oil. Petrol and diesel are, among others, the two major refinery products derived from crude oil. Moreover, Sebi is also looking at re-allowing futures trade in tur and urad, which were banned in 2007 after a spike in prices of these commodities. Earlier too, there was an industry demand to allow futures trade in these two petroleum products. Sebi had sent the proposal to the petroleum ministry.
Sebi General Manager (Commodity Segment) Chhavi Kapoor in a webinar hosted by the PHD Chamber of Commerce and Industry (PHDCCI), said, “Yes, all products that I mentioned over here (tur and urad weather indices), including petrol and diesel, are being looked into.” Also, she added that many products are in the pipeline, and given the market conditions, these products will be looked into. “I cannot say whether these products will come or not.”
On allowing derivative trading commodities such as skimmed milk powder (SMP), the Sebi official said it is ready to consider new products if industry submits a proposal after a thorough research and justifying its need. The government list of 91 notified commodities on which exchanges can launch commodities for trading, cannot be “sacrosanct”, she said adding that the exchanges should look at new products learning from the current COVID-19 crisis.
“COVID-19 has been a big jolt, but it is also an opportunity for all of us to learn what we can do in future so that a pandemic of this kind will not affect the market,” she said and noted that there has been no disruption as such in the commodities market as people have been able to trade smoothly.