Singapore: Kuwait Petroleum Corp (KPC) has agreed to sell gas oil and jet fuel under long-term contracts for 2017 at nearly half the premiums of what it sold in 2016, traders said on Thursday.

KPC has agreed to finalise its 2017 term contract to sell 500ppm sulphur gas oil at a premium of 60 cents a barrel to Middle East quotes, down from $1.15 (Dh4.22) for 2016, they said.

Buyers include Royal Dutch Shell, BP and Total, traders said.

For jet fuel, KPC has agreed to a premium of 90 to 95 cents a barrel to Middle East quotes, down from 2016’s $1.60. Buyers include Shell, BP, Total and Emirates National Oil Company (Enoc), they added.

Buyer details could not immediately be confirmed with the relevant companies.

KPC could not immediately be reached for comment.

Both oil products contracts are to be finalised on a free-on-board (FOB) basis, traders said.

Volumes and term buyers are consistent with current contracts, one of the sources said.

“Most term buyers were losing money as spot levels have been much lower this year, so I think they are reluctant to pay higher [for 2017],” a Singapore-based industry source said.

The lower premiums for gas oil could also partly have been driven by a drop in purchases by its long-standing term customer in Indonesia, traders said.

Over the first half of this year, Indonesia’s state-owned Pertamina only imported 600,000 barrels of gas oil, in line with a drop in domestic demand after a biodiesel mandate, traders have said.