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Securing a reliable and consistent supply of fuel oil and petroleum products is crucial for businesses in various industries, from energy generation to transportation. A well-structured sourcing contract with refineries ensures not only steady availability but also optimal pricing, compliance with industry standards, and long-term collaboration. Key Components of a Fuel Oil and Petroleum Products Sourcing Contract: Product Specifications The contract must clearly define the types and grades of fuel oil or petroleum products being sourced. This may include specifications for: - Fuel Oil (CST 180, CST 380, LSFO, HSFO): Based on viscosity, sulfur content, and calorific value. - Diesel, Gasoline, and Jet Fuel: According to industry standards such as ASTM or ISO specifications. - Other Petroleum Derivatives: Including lubricants, bitumen, or specialty chemicals. Detailed product specifications ensure that the sourced products meet the technical requirements of the end-user, ensuring consistent performance and minimizing operational disruptions. . Pricing and Payment Terms A clear pricing structure is essential in a sourcing contract. Pricing mechanisms can be based on: - Fixed Price: A pre-agreed price for the duration of the contract. - Market-Linked Price: Indexed to market rates such as Brent Crude or WTI with provisions for fluctuations. Payment terms must be transparent, detailing credit periods, penalties for late payments, and incentives for early settlements. Flexible payment structures can help foster long-term partnerships with refineries. . Supply Schedule and Quantities A critical part of any sourcing contract is the delivery schedule and the volumes to be supplied. The contract should specify: - Monthly or Quarterly Supply Volumes: Ensuring refineries meet the company’s operational needs without shortage