Introduction — The Hidden Reality Buyers Never See

In every EN590 or Jet A1 transaction, money moves long before the first drop of fuel is injected, transferred, or loaded.

Buyers often ask:

• “How do sellers make money?”

• “Why do mandates earn more than brokers?”

• “Why is ‘net discount’ confidential?”

• “Why can’t buyers see the gross price?”

• “How does IMFPA protect commission?”

The truth:

👉 The real revenue in petroleum deals is invisible, embedded inside:

• Markup

• Commission allocation

• Protected side agreements

• Price spreads

• Contract premiums

• Allocation incentives

• Tank-based financial arbitrage

• Monetization of SBLC/LC

This article makes the invisible visible, professionally, legally, and without revealing any proprietary refinery protocol.

SECTION 1 — Understanding the Context: The Real Problem Behind Markup & Commissions

1.1 Buyers Think Price = Seller Profit (False)

Buyers assume:

• Price per MT

• Discount

• Premium

…represent seller profit.

This is incorrect.

In reality:

• Sellers profit from allocations

• Mandates profit from secured commissions

• Refiners profit from capacity utilization

• Traders profit from spreads

• Intermediaries profit from side agreements

• Tank farms profit from throughput fees

The “price” is only one element of the financial architecture.

1.2 The Industry Is Built on Multi-Layered Incentives

Inside a single EN590 contract, you may find:

• Buyer side commission

• Seller side commission

• Mandate allocation

• Intermediary markup

• Premium for delivery flexibility

• Tank-to-tank fees

• Trade finance spreads (MT103/LC/SBLC)

• Contract rollover uplift

This entire ecosystem is invisible to the buyer because:

👉 The buyer pays ONE single price.
👉 Everything else is internal.

1.3 Why Commission and Markup Are “Hidden”

Because exposing commission structures:

• Triggers conflicts

• Allows bypassing

• Reveals chain structure

• Enables manipulation

• Creates negotiation problems

Refineries and title holders protect their ecosystem by ensuring:

• Net price is confidential

• Commission routes are protected by IMFPA

• Mandates are verified

• Markup is hidden in the spread

SECTION 2 — A Complete Breakdown of How Money Really Moves in EN590 Deals

Below is the exact financial logic behind markup, commissions, and legal side agreements.

2.1 The Two Prices: Gross vs Net (Critical)

Every EN590 offer contains:

1. Gross Price

The price paid by buyer.
Includes:

• Seller side commission

• Buyer side commission

• Mandate fees

• Intermediary markup

2. Net Price

The real refinery/title holder price, confidential.

Buyers must never see the net price because:

• It exposes profit structure

• It reveals internal chain

• It allows bypassing

• It destroys deal stability

2.2 Markup = The Invisible Revenue Layer

Markup is the difference between:

✔ Net price (refinery/title holder)
✔ Gross price (what buyer pays)

Markup is ALWAYS internal.

Example:

• NET price = $580/MT

• GROSS price = $595/MT

• MARKUP = $15/MT

This $15 is distributed among:

• Buyer-side agents

• Seller-side agents

• Mandates

• Facilitators

• Introducers

• Advisors

2.3 Commission Structure (Legally Distributed)

1. Buyer Side Commission

Paid by buyer.
Usually: $5–$15 per MT depending on contract.

It goes to:

• Buyer mandate

• Intermediaries

• Brokers

• Consultants

2. Seller Side Commission

Paid by seller/refinery.
Usually: $5–$20 per MT depending on allocation chain.

It goes to:

• Seller mandate

• Allocation holders

• Back-to-back contracted intermediaries

2.4 IMFPA (International Master Fee Protection Agreement)

IMFPA is the only legal document protecting commission distribution.
It ensures:

• All parties get paid

• Commission is bank-protected

• No bypass

• No change in beneficiaries

• Automatic payment upon MT103

• Fully confidential structure

IMFPA is not a contract between buyer and seller.
It is a contract between:

• Mandates

• Intermediaries

• Consultants

• Facilitators

2.5 Side Agreements (The Hidden Part of Every Deal)

Side agreements cover:

• Private commission splits

• Mandate fee arrangements

• One-time introducer fees

• Premiums for allocation access

• Loss compensation for tank farm delays

• Roll-over commission for 12-month contracts

• Incentives for buyer performance

They are legal IF:

• Parties are disclosed

• No sanction risk

• No fraud is involved

• They do not change SPA terms

Side agreements DO NOT affect:

• SPA

• POP

• DTA

• SGS

• Payment mechanics

They simply allocate internal earnings.

SECTION 3 — NNRV Expert Analysis: Understanding Risks & Compliance

3.1 Most Buyers Don’t Understand That Price ≠ Seller Profit

Refinery profit comes from:

• Contract allocation

• Crack spread

• Tank throughput

• Refinery margins

• Not from “per MT discount”

Sellers do not “make money” from commission.
Commission belongs to intermediaries.

3.2 Why Buyers Must Never Ask for Commission Structure

Asking:

• “How much commission is there?”

• “Who gets what?”

• “Show me net price.”

Immediately identifies you as:

❌ Broker
❌ Inexperienced
❌ Non-institutional
❌ High-risk buyer

Refineries refuse such buyers instantly.

3.3 Why Commission Must Be Legal & Protected

Illegal commission = red flag.
Legal commission must be:

✔ Declared in IMFPA
✔ Paid after MT103
✔ Bank-to-bank
✔ Transparent between intermediaries
✔ Separate from SPA

This is the institutional standard.

3.4 Why Markup Must Be Invisible to the Buyer

Because if buyer knows markup:

• They bypass the chain

• They create conflict

• They try to negotiate net

• They weaken the deal

Confidential markup is required for deal success.

SECTION 4 — Step-by-Step Process: How Markup & Commission Flow

Step 1 — Buyer signs SPA (price = gross)

Only gross price is visible.

Step 2 — POP is released

No commission disclosed.

Step 3 — DTA and DIP test

Unit cost + SGS fees paid.

Step 4 — Buyer sends MT103

At this moment, IMFPA activates.

Step 5 — Commission is paid automatically

Bank distributes:

• Buyer-side commission

• Seller-side commission

• Side agreements

• Facilitator fees

• Roll-over commissions

Step 6 — Product is injected / loaded

Deal is complete.

SECTION 5 — Questions & Answers (20 Total)

10 Buyer Questions

1. Why can’t I see the net price?

2. Why is markup hidden?

3. Who pays commission?

4. Is commission added on top of the price? (No)

5. Is my price affected by commission? (No)

6. Why don’t sellers disclose chains?

7. Is markup legal? (Yes)

8. What protects my side commission?

9. Is IMFPA safe?

10. Can NNRV structure markup for me? (Yes)

10 Seller Questions

1. How do I protect my mandates?

2. How do I prevent bypassing?

3. Should I disclose chain? (No)

4. How to structure commission legally?

5. How much commission is acceptable?

6. Do intermediaries get paid?

7. How do side agreements work?

8. What if buyer requests net?

9. How do I ensure split is fair?

10. Can NNRV manage IMFPA execution? (Yes)

SECTION 6 — Why These Structures Are Recognized Worldwide

The commission system follows:

• ICC rules

• Standard trade finance practices

• International fee protection models

• Anti-fraud compliance (AML/KYC)

• Basel III frameworks

• FATF guidelines

• European banking regulations

Used by:

• Vitol

• Trafigura

• Glencore

• Shell

• Gunvor

• Mercuria

• TotalEnergies

SECTION 7 — Professional CTA

📌 Need to Structure Legal Markup, Commission & IMFPA for Your EN590 Deal?

NNRV Trade Partners offers:

• IMFPA structuring

• Commission chain organization

• Mandate verification

• Legal fee protection

• Clean markup architecture

• Seller & buyer compliance

• Confidential advisory

📩 info@nnrvtradepartners.com
🌐 www.nnrvtradepartners.com

We protect your commission and secure your deal.

Mini FAQ (5 Key Questions)

1. Is markup legal in EN590 deals?
   Yes — when documented properly.

2. Do buyers ever see commission?
   No — only gross price.

3. Who pays commission?
   The buyer pays gross; bank distributes commission internally.

4. Does markup increase buyer price?
   No — buyer pays ONE price.

5. Does NNRV manage IMFPA?
   Yes — fully compliant.

Why Choose NNRV Trade Partners?

• Institutional-grade compliance

• Mastery of commission protection

• Clean chain management

• Professional IMFPA drafting

• Zero-fraud structure

• Global operational credibility