The decision was taken by the ministry after consultations with oil marketing companies and other experts.
New Delhi: The oil ministry has given its in-principle approval for futures trading in petrol as well as diesel and the final clearance from regulator Sebi should come soon, a top official of commodity derivatives exchange ICEX said on Monday amid rising fuel prices.
The development also comes at a time when state-run oil marketers have hiked petrol and diesel prices continuously for the past two weeks.
"The Petroleum and Natural Gas Ministry has given an in-principle nod to launch petrol and diesel futures contracts and we are hoping that Sebi will give final approval in this regard soon," ICEX Managing Director and Chief Executive Officer Sanjit Prasad told PTI.
He said the decision was taken by the ministry after consultations with oil marketing companies and other experts. The contracts are expected to help hedge against volatility in oil prices.
The Indian Commodity Exchange (ICEX) had approached Sebi seeking its nod to launch petrol and diesel futures contracts. Following this, the capital markets watchdog had sought views from the ministry in this regard.
ICEX was asked by the ministry to give a detailed presentation on petrol and diesel futures contracts to oil minister Dharmendra Pradhan, senior bureaucrats and oil marketing companies, Prasad noted.
"After getting approval from the regulator, we will soon launch the product as we have all the infrastructure in place for this," he added.
Petrol price has been hiked by Rs 3.64 a litre and diesel by Rs 3.24 in Delhi since state-owned oil firms ended a 19-day pre-Karnataka poll hiatus to resume daily price revision on May 14.
Last month, the commodity exchange launched 30-cents diamond futures contracts in addition to its product basket of 1-carat and 50-cents contracts. The bourse had launched the world's first diamond derivatives contracts in August 2017 with 1-carat futures contracts, and had subsequently added the 50-cents contracts.