The following guide outlines the methodology used in Portland’s various price assessments, listed by Toolkit.
Portland’s Wholesale price assessments are based on three primary information sources:
– Physical spot quotes for product supplied to the UK market
– Day-to-day movement in the relevant underlying futures market
– Trade settlement data
By taking a blend of physical, futures and trade settlement data, Portland’s methodology accounts for the three primary mechanisms of price benchmarking to create a robust, accurate reflection of the wholesale market.
If the grade in question is traded in a foreign currency, such as US Dollar (USD), a conversion is made to calculate the price in local UK £ Sterling (GBP), using published exchange rate fixings.
Where grades are traded in an alternative unit of measurement e.g. tonnes, a conversion is made to calculate the price in litres, using conversion factors published by the UK Government’s Department for Business, Energy and Industrial Strategy (BEIS).
Where relevant, UK market prices account for the cost of compliance with the Renewable Transport Fuels Obligation (RTFO), based on an industry standard ‘split quote’ mechanism that applies the RTFO in accordance with the relevant grade.
Portland’s Delivered-In price assessments are calculated using a blend of contract and spot rates for the delivery of physical product to UK end-user sites.
Contract rates are calculated using Portland’s Wholesale price assessment, plus a variable premium to account for transport costs and supplier margin, adjusted periodically in accordance with prevailing market conditions.
Spot rates are calculated based on daily ex-rack quotations, plus a regional delivery premium adjusted monthly in accordance with benchmarked haulage costs.
A weighted average is then calculated based on a blend of calculated contract and spot rates, to produce an overall regional price. National average prices are weighted by regional fuel consumption, adjusted annually.
Portland’s Forecourt price assessments are based on retail price data submitted by UK forecourts on a daily basis.
‘Supermarket’ rates account for daily prices submitted by sites categorised as ‘hypermarket’ sites, such as ASDA, Morrisons, Sainsburys and Tesco sites. ‘All sites’ rates account for all daily site data received.
Regional averages are calculated based on site location, with regions categorised using postcode information. National averages are an average of all daily site data received.
Fuel Card Toolkit
Portland’s Fuel Card price assessments are calculated using price quotations for the cost of product transfer into various fuel card networks on a weekly basis, plus average network operator handling fees, adjusted periodically in accordance with prevailing market conditions.
Predicted retail prices are calculated based on movement in current wholesale markets, accounting for a two-week supply chain lag.
Portland’s renewable price assessments vary dependent on grade, as follows:
Portland’s Renewables HVO price assessment is calculated using a weighted average of two models – a feedstock-based model and a cost-of-carbon-compliance model. Due to lack of liquidity in the physical market and there being no forward market for HVO at present, daily prices are methodology-based, rather than reflecting spot physical quotations or futures pricing.
For the feedstock-based model, a price is derived from assessing the cost of feedstock, such as Used Cooking Oil (UCO), plus a variable production cost.
The cost of compliance model accounts for buy-out costs for carbon reduction obligations in Europe (the primary market for HVO) benchmarked daily, as a premium to Portland’s Wholesale Diesel index.
Prices are converted to pence per litre using the conversion process outlined in Portland’s Wholesale methodology. Where relevant, UK market prices also account for the value of Renewable Transport Fuel Certificates (RTFCs).
Portland’s Renewables Biodiesel price assessments are calculated using a mathematical blend of Portland’s Wholesale Diesel and Wholesale FAME-10 prices, based on the relevant biodiesel blend percentage e.g. B7 accounts for a 93% Wholesale Diesel and a 7% Wholesale FAME-10 blend.
Portland’s Renewables FAME0 and Renewables FAME-10 prices are calculated in accordance with Portland’s Wholesale methodology.
Portland’s Renewables Propane price is calculated in accordance with Portland’s Wholesale methodology.