What Is an ICPO?  Understanding the Irrevocable Corporate Purchase Order

An ICPO (Irrevocable Corporate Purchase Order) is a formal purchase document issued by a buyer to a seller to communicate the buyer’s intention to purchase a specific product under stated commercial terms.

In petroleum trading and international fuel transactions, an ICPO may identify the buyer, product, quantity, delivery location, pricing structure, payment terms, and other requirements necessary for the seller to evaluate and process the proposed transaction.

An ICPO is commonly used for transactions involving petroleum products such as EN590 10 PPM diesel, Jet A-1 aviation fuel, D6 fuel oil, D2 diesel, LNG, LPG, crude oil, gasoline, and other energy commodities.

What Does ICPO Stand For?

ICPO stands for Irrevocable Corporate Purchase Order.

The document is generally issued on the buyer's corporate letterhead and signed by an authorized representative. It provides the seller with a structured description of the buyer's purchase requirements.

The exact format and requirements can vary depending on the seller, refinery, supplier, product, destination, and transaction procedure.

What Information Is Included in an ICPO?

A petroleum ICPO may include:
 

• Buyer’s legal company name

• Company registration information

• Registered business address

• Authorized representative

• Contact information

• Product name and specification

• Required quantity

• Delivery location or port

• FOB or CIF terms

• Proposed pricing or pricing formula

• Payment terms

• Delivery schedule

• Transaction procedure

• Required documentation

• Authorized signature and corporate stamp
   

Buyers should ensure that all information provided in the ICPO is accurate and consistent with their corporate documentation.

ICPO in Petroleum Trading

In international petroleum transactions, the ICPO can be part of the documentation process between a qualified buyer and seller.

A transaction may involve several documents and stages, such as:

Buyer Inquiry → LOI → Seller Offer/SCO → ICPO → Commercial Invoice → Storage/Logistics Verification → Inspection → Payment → Title Transfer/Lifting

However, there is no universal petroleum transaction procedure. The sequence of documents and verification steps can differ by seller, refinery, terminal, product, port, and contractual arrangement.

ICPO vs. LOI

One of the most common questions from fuel buyers is the difference between an ICPO and an LOI.
An LOI (Letter of Intent) generally communicates a buyer's interest in purchasing a product and outlines proposed commercial requirements.

An ICPO (Irrevocable Corporate Purchase Order) is generally a more formal purchase-order document that identifies the buyer's specific purchase requirements and proposed terms.

The documents are not interchangeable in every transaction. Sellers may have their own documentation requirements and may request an LOI, ICPO, or both.

Is an ICPO Proof of Funds?

No. An ICPO is not proof of funds.

An ICPO communicates the buyer's purchase order and commercial requirements. It does not independently establish that the buyer has sufficient funds to complete the transaction.

Depending on the transaction, the seller may request separate financial verification or other documentation as part of its due-diligence process.

What Happens After an ICPO Is Submitted?

The next step depends on the seller's approved transaction procedure.

The seller may review the ICPO for:
 

• Buyer identity

• Corporate information

• Product requirements

• Quantity

• Delivery location

• Pricing

• Payment terms

• Compliance requirements

• Acceptance of the seller's procedure
   

If the ICPO is accepted, the parties may proceed with additional commercial documentation, storage verification, inspection, contracts, and other transaction requirements.

ICPO for EN590 10PPM

Buyers seeking EN590 10PPM diesel may use an ICPO to specify the required quantity, destination, delivery terms, pricing structure, and other commercial requirements.

Because  EN590  transactions can involve different ports, storage facilities, delivery terms, and inspection arrangements, buyers should make sure their ICPO accurately reflects the requirements of the specific transaction.

ICPO for Jet A-1

For Jet A-1 aviation fuel, an ICPO may identify the requested quantity, specification, destination, delivery terms, pricing, and proposed payment structure.

The seller may require additional documentation and verification before accepting the buyer's purchase order.

How to Prepare an ICPO

A professional ICPO should be:
 

1. Issued by the actual purchasing entity.

2. Prepared on official company letterhead.

3. Signed by an authorized representative.

4. Specific about the product and quantity.

5. Clear about FOB or CIF requirements.

6. Consistent with the buyer's corporate documentation.

7. Clear about the requested delivery location.

8. Consistent with the seller's accepted transaction procedure.

9. Free from inaccurate or unverifiable claims.

10. Submitted only after the buyer has reviewed the seller's commercial terms.
     

Important ICPO Considerations for Fuel Buyers

Before submitting an ICPO, buyers should conduct appropriate seller and transaction due diligence.

An ICPO should not be treated as a substitute for verifying the seller, refinery representation, product availability, storage arrangements, inspection process, contractual terms, and payment requirements.

Likewise, sellers should properly verify the buyer's corporate identity, authority, purchasing capacity, and ability to perform.

Frequently Asked Questions About ICPO

What does ICPO mean in fuel trading?

ICPO means Irrevocable Corporate Purchase Order. It is a formal purchase document used by a buyer to communicate its requirements and proposed terms for purchasing a commodity.

Is an ICPO legally binding?

The legal effect of an ICPO depends on its wording, applicable law, transaction documents, and the circumstances of the parties. Buyers and sellers should obtain appropriate legal advice regarding contractual obligations.

Who issues an ICPO?

The buyer or the buyer's authorized representative normally issues the ICPO to the seller.

Can an ICPO be used to purchase diesel?

Yes. ICPOs may be used in commercial diesel transactions, including transactions involving EN590 10 PPM and other petroleum products.

Does an ICPO guarantee product delivery?

No. An ICPO does not by itself guarantee that product will be delivered. Delivery depends on the seller's acceptance, contractual agreements, product availability, logistics, inspection, payment, and other applicable conditions.

What is the difference between ICPO and SCO?

An ICPO is generally issued by the buyer, while an SCO (Soft Corporate Offer) is generally issued by the seller to communicate commercial terms for a proposed transaction.

What is the difference between ICPO and FCO?

An ICPO is generally the buyer's purchase order, while an FCO (Full Corporate Offer) is generally a seller's formal commercial offer containing specific terms and conditions.