Understanding the EN590 Diesel Transaction Process and Pricing in Singapore

The global demand for diesel fuels like EN590 continues to rise, especially in key trading hubs such as Singapore. For buyers and sellers navigating this market, understanding the transaction process and pricing details is essential to secure a smooth and transparent deal. This post breaks down the key elements of purchasing EN590 diesel in Singapore, focusing on a recent offer of diesel originating from Kazakhstan, priced at $450 gross and $430 net per metric ton on an FOB basis.

Diesel storage tanks at Singapore port

What is EN590 Diesel and Why Singapore?

EN590 is a European standard for diesel fuel, specifying the physical properties and chemical composition to ensure quality and environmental compliance. It is widely used in vehicles and machinery requiring ultra-low sulfur diesel (ULSD) with a maximum sulfur content of 10 parts per million (ppm). Singapore serves as a strategic trading hub due to its advanced port facilities, regulatory environment, and proximity to major Asian markets.

The offer in focus involves 300,000 metric tons of EN590 diesel with 10 ppm sulfur content, originating from Kazakhstan. The delivery terms are DIP & PAY, meaning the buyer inspects the product in the seller’s tanks before payment and lifting.

Pricing Breakdown and Commission Structure

The FOB (Free On Board) price is listed as $450 gross and $430 net per metric ton. This pricing means the seller covers all costs until the product is loaded onto the vessel at the port, after which the buyer assumes responsibility.

• Gross Price: $450 per metric ton

• Net Price: $430 per metric ton (after deducting commissions)

• Commission: $10 per metric ton for both seller and buyer sides

  
  

This commission structure is common in large commodity transactions, ensuring intermediaries on both sides are compensated fairly.

Step-by-Step Transaction Procedure

Understanding the transactional steps helps buyers and sellers avoid pitfalls and delays. Here is the detailed process for this EN590 diesel deal:

1. Buyer Issues ICPO

The buyer begins by issuing an Irrevocable Corporate Purchase Order (ICPO). This document includes the buyer’s commitment to purchase and must be accompanied by:

• The seller’s working procedure as the transaction guide

• Banking details

• A scanned copy of the buyer’s passport

• Company registration number

• Proof of funds to confirm the buyer can finance the purchase

  
  

This step establishes the buyer’s seriousness and financial capability.

2. Seller Issues ICC Warning Letter and Commercial Invoice

Once the ICPO is received, the seller sends an ICC Warning Letter and a Commercial Invoice (CI) for the product stored in tanks at the port. The buyer reviews, signs, and returns the CI to confirm acceptance.

3. Seller Provides Proof of Product (PPOP)

The seller then supplies key documents to verify the product’s existence and quality:

• Tank Storage Receipt (TSR)

• Commitment Letter to supply

• SGS Report from Jurong Port dated 21.05.2025

• Statement of product availability

  
  

These documents reassure the buyer that the diesel is physically available and meets quality standards.

4. Buyer Verifies SGS Report

The buyer contacts SGS, the independent inspection company, to confirm the authenticity and accuracy of the SGS analysis report. This step is crucial for quality assurance.

5. Buyer Requests Invoice and Arranges Dip Test

After SGS confirmation, the buyer requests the invoice and extends the seller’s tank storage for a minimum of seven days to schedule a dip test. The dip test measures the exact quantity of product in the tank.

Tank storage costs per day:

• 100,000 MT: $65,000

• 200,000 MT: $110,000

• 300,000 MT: $165,000

  
  

These fees cover the cost of storing the diesel during the inspection period.

Dip test on diesel in storage tank

6. Payment and Title Transfer

Upon successful dip test results, the buyer makes full payment based on the SGS report via MT103 (bank transfer). The seller then transfers ownership title and sends all export documents. The buyer can either lift the product onto their vessel or take over the seller’s tanks for further storage.

7. Signing NCNDA/IMFPA Agreements

All intermediaries involved sign Non-Circumvention, Non-Disclosure Agreements (NCNDA) and International Master Fee Protection Agreements (IMFPA). These agreements protect the interests of all parties and ensure commission payments.

8. Final Authorization and Transaction Completion

The seller endorses the NCNDA/IMFPA and provides Authorization to Sell and Collect (ATSC). The buyer returns the signed NCNDA, completing the transaction cycle.

Practical Tips for Buyers and Sellers

• Verify all documents carefully. Authenticity of the SGS report and tank receipts is critical.

• Understand storage costs. Daily tank fees can add up quickly, so plan dip tests and lifting schedules efficiently.

• Use secure payment methods. MT103 bank transfers provide traceability and security.

• Maintain clear communication. Transparency between buyer, seller, and intermediaries reduces risks.

• Sign all necessary agreements. NCNDA and IMFPA protect commissions and confidentiality.

  
  

Why This Transaction Model Works for Singapore

Singapore’s port infrastructure supports large-scale storage and inspection services, making DIP & PAY transactions practical. Buyers can physically verify product quality before payment, reducing fraud risk. The clear pricing and commission structure also help all parties understand their financial commitments upfront.

Cargo vessel loading diesel at Singapore port

Summary

Purchasing EN590 diesel in Singapore involves a detailed, stepwise process designed to protect both buyer and seller interests. The FOB pricing from Kazakhstan at $450 gross and $430 net per metric ton reflects current market conditions, with clear commission fees and storage costs. Following the outlined transactional procedure ensures transparency, product verification, and secure payment.

For buyers entering this market, understanding each step—from issuing ICPO to final title transfer—helps avoid common pitfalls and ensures a successful transaction. Singapore’s role as a trading hub makes it an ideal location for such deals, combining logistical advantages with regulatory oversight.

Interested parties should prepare all required documentation and plan for storage fees during inspection periods. Clear communication and adherence to the process will support smooth, timely completion of EN590 diesel purchases.